Advance Ruling Authority denies tax classification request for "Glass-fibre Reinforced Gypsum Board"

The Advance Ruling Authority rejected the applicant's request for an advance ruling on the classification of "Glass-fibre Reinforced Gypsum Board" for tax purposes. The application was deemed non-maintainable as the product in question had not been manufactured, and no physical samples were provided for testing. Therefore, the Authority concluded that without the existence of the proposed product at the time of the application, the classification could not be accurately determined, leading to the rejection of the applicant's request under Section 98(2) of the CGST Act, 2017.

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Issues:
Classification of the proposed product as "Glass-fibre Reinforced Gypsum Board" for availing concessional tax rate under Notification no - 1/2017 - Central Tax.

Analysis:
The applicant, a manufacturer of gypsum boards, sought a ruling on the classification of a new product - Glass-fibre Reinforced Gypsum Board (GRG) - for tax purposes. The applicant contended that the product, reinforced with glass-fibre, should qualify for the concessional tax rate of 12% under Notification no - 1/2017. They argued that the presence of any amount of glass-fibre in the board should make it eligible as GRG, even if the quantity is minimal. The applicant cited case laws and applied the Literal Rule of Interpretation to support their claim.

The jurisdictional officer raised concerns about the classification of the product, as it had not been manufactured yet, and no samples were provided for testing. The officer suggested that the classification could only be determined accurately after testing the product in an accredited laboratory. The officer emphasized the need for physical samples to ascertain the exact nature of the proposed product.

During the hearing, both parties presented their arguments, with the applicant stressing the technical aspects of the product and its intended classification. However, the Advance Ruling Authority highlighted the importance of submitting samples for products under consideration for classification. They noted that Section 97(2)(a) of the CGST Act requires questions on classification to be raised concerning goods that are being supplied or proposed for supply. Since the product in question had not been manufactured yet, the Authority deemed the application non-maintainable under Section 95 of the CGST Act, as the goods for which classification was sought did not exist at the time of the application.

Ultimately, the Advance Ruling Authority rejected the applicant's request for an advance ruling, citing the non-maintainability of the application due to the absence of physical samples and the proposed product not being in existence at the time of the application. The decision was made under the provisions of sub-section 2 of Section 98 of the CGST Act, 2017.

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