AAR rules 'Slate for Teacher' & 'Slate for Student' under Tariff Heading 96.10 for GST exemption.

The Authority for Advance Ruling (AAR) classified 'Slate for Teacher' and 'Slate for Student' under Tariff Heading 96.10, making them eligible for GST exemption. The AAR determined that the products fell under the common parlance understanding of 'Slates' and were exempt from GST as per relevant notifications. Additionally, the ruling specified that if the applicant received manufacturing services on the slates from an unregistered supplier, GST must be paid under the Reverse Charge Mechanism, subject to any available exemptions.

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Issues Involved
1. Classification of goods: 'Slate for Teacher' and 'Slate for Student'.
2. Rate of Goods and Services Tax (GST) on 'Slate for Teacher' and 'Slate for Student'.
3. Applicability of Reverse Charge Mechanism (RCM) for job work on slates.

Detailed Analysis

1. Classification of Goods: 'Slate for Teacher' and 'Slate for Student'
The main issue presented was the classification of 'Slate for Teacher' and 'Slate for Student'. The applicant argued that both slates should be treated as tax-free under GST, similar to their status under the Gujarat Value Added Tax Act. The Authority for Advance Ruling (AAR) considered the technical specifications and the Harmonised System of Nomenclature (HSN) Explanatory Notes for Heading 96.10, which includes "slates and boards with writing or drawing surfaces, whether or not framed." The technical specifications provided by the applicant showed that both types of slates are designed for writing or drawing with slate pens and chalks. Thus, the AAR concluded that both 'Slate for Teacher' and 'Slate for Student' are appropriately classifiable under Tariff Heading 96.10.

2. Rate of Goods and Services Tax on 'Slate for Teacher' and 'Slate for Student'
The next issue was determining the applicable GST rate for 'Slate for Teacher' and 'Slate for Student'. The AAR noted that products falling under Tariff Item 9610 00 00 are exempt from GST as per Sl. No. 146 of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017. The term 'Slates' was not defined under the CGST Act, GGST Act, or IGST Act. The AAR applied the principle of common parlance, citing the Supreme Court's rulings that terms not defined in the statute should be understood in their popular sense. The products were referred to as 'Slate for Student' and 'Slate for Teacher' in the document issued by the Gujarat Council of Elementary Education, indicating that they are known as 'Slates' in common parlance. Therefore, both products are eligible for exemption from GST.

3. Applicability of Reverse Charge Mechanism for Job Work on Slates
The applicant also raised the issue of whether GST needs to be paid under the Reverse Charge Mechanism (RCM) for job work done on slates when the main manufactured item is tax-free. The AAR referred to clause 3 of Schedule II of the CGST Act and GGST Act, which considers any treatment or process applied to another person's goods as a supply of services. Therefore, applicable GST on 'manufacturing services on physical inputs (goods) owned by others' must be paid. As per Section 9(4) of the CGST Act and GGST Act, if the supplier of such service is unregistered, the recipient (in this case, the applicant) must pay GST on a reverse charge basis, subject to any available exemptions.

Ruling
(A) The products 'Slate for Student' and 'Slate for Teacher' supplied by the applicant are classifiable under Tariff Heading 96.10.
(B) These products are eligible for exemption from GST as per Sl. No. 146 of Notification No. 2/2017-Central Tax (Rate) and corresponding notifications under the GGST Act and IGST Act.
(C) If the applicant receives 'manufacturing services on physical inputs (goods) owned by others' from an unregistered supplier, GST must be paid under Section 9(4) of the CGST Act and GGST Act, subject to any available exemptions.

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