GST Rate for Rubber Pad in Semi-Finished Condition Clarified by Authority

The case involved a query regarding the classification and applicable GST rate of Rubber Pad supplied in a semi-finished condition. The applicant sought clarification on the GST rate if the product was supplied to entities other than Railways, as they were already supplying to Railways at a 5% GST rate. After considering the relevant provisions and a government circular, it was determined that Rubber Pad falls under Chapter 4016 of the GST Tariff Act, attracting an 18% GST rate (9% CGST + 9% SGST) when supplied in a semi-finished condition to entities other than Railways.

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Issues: Classification of goods (Rubber Pad) when supplied in semi-finished condition to a person other than railways; Applicable rate of GST on Rubber Pad in semi-finished condition.

Analysis:
1. The ruling was sought under Sub-Section (1) of Section 97 of the CGST/SGST Act, 2017 by M/s. V K Enterprises, registered with GSTN, regarding the classification and GST rate of Rubber Pad supplied in semi-finished condition.
2. Advance Ruling under GST pertains to decisions provided by the authority on matters specified in the Act concerning the supply of goods or services undertaken or proposed by the applicant.
3. Subsection (2) of Section 97 allows seeking advance ruling on various aspects including classification of goods, applicability of notifications, determination of tax liability, input tax credit admissibility, and registration requirements.
4. The applicant's request for advance ruling on classification and tax liability determination was admitted under Section 97(2)(a) & (e) of the Act, leading to a hearing where samples and manufacturing process details were submitted.
5. The applicant, a manufacturer of Rubber Pad supplying to Railways at 5% GST, sought clarification on the classification and applicable GST rate if supplied to entities other than Railways.
6. A government circular clarified that only goods under Chapter 86 supplied to Railways attract 5% GST, while goods from other chapters are subject to general applicable GST rates, even if supplied to Railways.
7. The circular highlighted that goods classified under Chapter 86 attract 5% GST when supplied to Railways, while goods from other chapters are subject to standard GST rates.
8. Upon review of the GST Tariff Act and records, it was determined that Rubber Pad falls under Chapter 4016, attracting an 18% GST rate (9% CGST + 9% SGST).
9. The final ruling stated that Rubber Pad falls under Chapter 4016 of the GST Tariff Act, 2017, and is subject to an 18% GST rate as of the ruling date.

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