GST classification of fly ash bricks and blocks: clarificatory circular confined the fly ash content to aggregate, not bricks or blocks.

Fly ash bricks and fly ash blocks were treated as covered by the concessional GST entry at 5% after a CBIC clarification stated that the 90% or more fly ash content requirement applied only to fly ash aggregate, not to bricks or blocks. The clarification also removed that condition from the relevant description with effect from 18 July 2022. On that basis, the earlier advance ruling taxing the goods at 18% could not be sustained, and the impugned orders were set aside. The point of principle is that a numerical content condition in a GST notification cannot be extended to distinct goods when the clarificatory circular limits that condition to another category.

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Issues: Whether fly ash bricks and fly ash blocks manufactured by the petitioner were liable to GST at 5% under the relevant notification, and whether the condition of 90% or more fly ash content applied to fly ash bricks.

Analysis: The applicable entry in the GST notification was clarified during the pendency of the petition by the CBIC circular, which stated that the condition of 90% or more fly ash content applied only to fly ash aggregate and not to fly ash bricks or fly ash blocks. The clarification also omitted that condition from the description with effect from 18 July 2022. In view of this express clarification, the earlier advance ruling that treated the petitioner's fly ash bricks as taxable at 18% could not be sustained. The notification entry, as clarified, covered fly ash bricks and fly ash blocks at the concessional rate.

Conclusion: The petitioner's fly ash bricks and fly ash blocks were held taxable at 5%, and the impugned orders were set aside.

Final Conclusion: The challenge to the advance ruling succeeded, and the goods manufactured by the petitioner were held entitled to the concessional GST rate under the clarified notification entry.

Ratio Decidendi: Where a clarificatory GST circular expressly states that a numerical content condition applies only to one category of goods, the condition cannot be extended to distinct goods covered by the same notification entry.

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