Rate classification

[Shrikanth Parmarthy]

Dear experts,

Facts:

1. There is ambiguity in the industry relating to rate classification of a particular product. The industry is of the view of applying a HSN where the GST rate is lower whereas the GST department is contending a HSN where GST rate applicable will be higher than the one claimed by Industry

2. There a 2 high court decisions where rate of the product is passed in favour of the Industry. Against one of the high court decision the GST Department has approached the supreme court and court has rejected the plea made by department.

Queries:

1. Should the industry wait for the GST council/CBIC to release a rate amendment notification based on the Supreme court rejection as mentioned above. OR

2. Should the industry proceed with apply the HSN with lower GST rate based on the supreme court rejection.

Kindly provide your inputs on how to proceed further.

AI Summary

Rate classification: apply lower HSN based on Supreme Court dismissal but monitor official notifications and document precedent.
A product's HSN classification is contested between industry (lower GST) and the tax department (higher GST). Two High Courts sided with industry and a departmental appeal was dismissed by the Supreme Court. Responses advise either awaiting a CBIC/GST Council circular that could formalise the position or relying on the judicial decisions to apply the lower rate immediately, while recognising risks of retrospective change, the need to document legal precedents, monitor official notifications, and seek case-specific legal advice.