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of <h1>Classification of Char-Dolochar under Customs Tariff Act: AAR ruling on IGST rate</h1> <h3>In Re: M/s. Jairaj Ispat Limited.,</h3> In Re: M/s. Jairaj Ispat Limited., - 2019 (30) G.S.T.L. 280 (A. A. R. - GST) Issues Involved:1. Classification of Char-Dolochar/Dolochar under the Customs Tariff Act, 1975.2. Determination of applicable GST rate based on the classification.Issue-wise Detailed Analysis:1. Classification of Char-Dolochar/Dolochar under the Customs Tariff Act, 1975:The applicant, engaged in manufacturing Sponge Iron, produces Char-Dolochar/Dolochar as a by-product. The key question is whether this by-product should be classified under Tariff Item 2621 90 90 or 2701 20 90 of the Customs Tariff Act, 1975. The applicant argues that Dolochar, emerging as waste during the manufacturing process, should be classified under Tariff Item 2621 90 90, citing its characteristics and previous judicial rulings.The applicant submits that Dolochar contains both ferrous content and fixed carbon, but due to its low calorific value and inability to produce flame, it should not be considered as a fuel manufactured from coal. They reference the Supreme Court’s decision in Union of India v. Ahmedabad Electricity Company Ltd. and CESTAT’s decision in Chief Commissioner of Central Excise and Service Tax, Hyderabad II v. Reactive Metals of India Pvt. Ltd., which support the classification of similar by-products under Chapter 2621.The Authority for Advance Ruling (AAR) concurs with the applicant’s view, noting that Dolochar is a by-product with properties akin to semi-coke, emerging during the manufacture of Sponge Iron and not a fuel manufactured from coal. Therefore, it is classifiable under Tariff Item 2621 90 90.2. Determination of applicable GST rate based on the classification:Based on the classification under Tariff Item 2621 90 90, the applicable GST rate needs to be determined. The applicant contends that Dolochar falls within Entry 30 of Schedule III of Notification No. 01/2017-Integrated Tax (Rate) dated 28 June 2017, which attracts an 18% IGST rate.The AAR confirms this classification and GST rate, emphasizing that Dolochar, being waste from the manufacture of iron or steel, is covered under Chapter Heading 2621. Consequently, the supply of Dolochar attracts an 18% IGST rate. For intra-State supplies, it attracts 9% CGST and 9% KGST, as per Entry 28 of Schedule III of Notification No. 01/2017-Central Tax (Rate) dated 28 June 2017.Ruling:The AAR concludes that Char-Dolochar/Dolochar (waste emerging during the process of manufacturing Sponge Iron) supplied by the applicant is classifiable under Tariff Item 2621 90 90 of the Customs Tariff Act, 1975. Accordingly, it attracts an 18% IGST rate. Intra-State supply of the same would attract 9% CGST and 9% KGST.
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