TaxTMI 
TaxTMI 
2019 (1) TMI 1021
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....on iv. Tile Adhesive for Stone Heavy Tile Application 2. Tile Grout i. Cement based Tile Grout ii. Epoxy based Tile Grout At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act". FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- Statement of relevant facts having a bearing on the question(s) raised 1.1. The Applicant is a manufacturer and dealer in paints and other chemical based products and adhesives. 1.2. Applicant is, inter alia, in the business of the buying and selling Tile Adhesives and Tile Grouting material. 1.3. The Applicant has been classifying the below mentioned two products under 24 of Schedule IV of Notification No. 1/2017- ....
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....rties. The product is sold as free flowing powder. This product is mixed with water to form a slurry and is then applied on the surface (where tiles have to be fixed using trowel. The said surface is then combed with notch trowel and tiles are fixed. This product is used under the tiles to join the tiles together in order to provide strength to the walls, floors, etc. where the tiles are applied. It is used an adhesive for bonding of tiles. 1.5.4 Tile Adhesive for Stone & Heavy Tile application: The product Tile Adhesive for Stone & Heavy Tile Application is single component Grey cement based polymer modified tile adhesive specially designed for heavy stone tile applications like granite, marble on internal as well as external vertical surfaces. The product is sold as free flowing powder. This product is mixed with water to form a slurry and is then applied on the surface (where tiles have to be fixed) using trowel. The said surface is then combed with notch trowel and tiles are fixed. It is used an adhesive for bonding of tiles to surface. 1.6 Tile Grout: Tile grout is compound used as joint filler between tiles. The product has to two version i.e. Cement based and epo....
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...., epoxy based; Epoxy resin, Hardener & Colorant. 2.2. The Applicant submits that there are two competing entries relevant for present classification of above two categories of products. 2.3. Entry 97 of Schedule III to Notification No. 1/2017-Central Taxes (Rate) dated 28.06.2017 is extracted below for ready reference: Schedule III 9% S.No. Chapter [Heading/Sub-heading/Tariff item Description of Goods 1 2 3 97 3824 Prepared binders for foundry moulds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included 2.4. The other competing entry is Entry 24 of the Schedule IV to Notification No. 1/2017 - Central Taxes (Rate) dated 28.06.2017. The same is extracted below for ready reference: Schedule IV 14% S.No. Chap/Hdg/Sub-hdg Tariff item Description of Goods 1 2 3 24. 3214 Glaziers putty, grafting putty, resin cements, caulking compounds and other mastics; painters fillings; non- refractory surfacing preparations for facades, indoor walls, floors, ceilings or the like 2.5. The Applicant submits t....
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....riff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. 3.3. In view of the Explanation (iv), the Chapter Heading under consideration shall be interpreted on the basis of rules of interpretation of the First Schedule to the Customs Tariff Act, 1975. Before resorting to the Chapter Notes and Sub Heading Notes Of the Customs Tariff Act, the relevant Tariff Items Of the Customs Tariff Act are extracted below for ready reference: (A): Relevant Extract of Chapter Heading 32 14: Tariff Item Description of goods Unit Rate of duty Standard Preferential areas 3214 GLAZIERS' PUTTY, GRAFTING PUTTY, RESIN CEMENTS, CAULKING COMPOUNDS AND OTHER MASTICS; PAINTERS' FILLINGS; NON-REFRACTORY SURFACING PREPARTIONS FOR FACADES, INDOOR WALLS, FLOORS, CEILINGS OR THE LIKE 32141000 - Glaziers' putty, grafting putty, resin cements,....
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....tz and cement with small quantities of added plasticisers, used for instance, after adding water, for setting wall or floor tiles. (3) Pasty preparations made by coating minerals fillers (ground marble, quartz, or a mixture of quartz and silicate, for instance) with a binder (plastics or resins), with added pigments and, where appropriate, water or solvent. (4) Liquid preparations consisting, for instance, of synthetic rubber or acrylic polymers, asbestos fibres mixed with a pigment, and water. These are applied on facades with paint brush or spray gun and form a much thicker layer than paint. 3.7. The Applicant submits that on a plain reading of the above HSN Explanatory Notes, it can be seen that the said Chapter Heading 3214 only includes Non-refractory surfacing preparations to make facades, indoor walls, floors and ceilings, swimming pool walls and floors, etc. water proof and improve their appearance. Further the said non-refractory preparations contained in Chapter Heading 3214 generally remain visible as final surfacing. 3.8. In the present case, all the above two categories of products are non-refractory preparations. However, they are not used for ....
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....her, Hon'ble Supreme Court in the case of Ramavatar Bhuadaiprasad Etc. Vs. Assistant Sales Tax Officer, Akola - (1961) 12 STC 286 (SC) = 1961 (3) TMI 55 - SUPREME COURT OF INDIA held that if a word is used in a taxing statute, it has to be understood as in common parlance. 3.15. Further, Hon'ble Supreme Court in the case of Commissioner of Sales Tax, Madhya Pradesh Vs. Jaswant Singh Charan Singh - (1967) 19 STC 469 (SC) while considering the question of Whether the word "coal" covers Charcoal, held that the meaning of the word 'coal' in the statute as understood in its commercial or popular sense would include "charcoal". The Apex Court upheld the decision of High Court Wherein the High Court had observed that while construing entries in a statute like the Sales Tax Acts, the Court should prefer the Popular meaning of the terms used in such entries and not their dictionary meanings and that so construed charcoal would be included in the word 'coal'. 3.16. The Hon'ble Supreme Court in the case of Commissioner of Central Excise Vs. Connaught Plaza Restaurant (P) Ltd. - (2012) 13 SCC 639 (SC) = 2012 (12) TMI 149 - SUPREME COURT was concerned with the question of whether the soft....
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....ng and bonding the tiles on the walls and floorings. It is not used as a surface finishing material. Hence, the said products will be covered under the above Chapter Heading 3824 only. Additional submissions on 08.08.2018 Brief facts: 1.1. The Applicant is a manufacturer and dealer in paints and other chemical based products and adhesives. Applicant is, inter alia, in the business of the buying and selling Tile Adhesives and Grouting material. 1.2. The Applicant has been classifying the below mentioned six products under 24 of Schedule IV of Notification No. 1/2017- Central Taxes (Rate) dated 28.06.2017 and paying CGST thereon. The description of the products is explained below and the invoices for the products are annexed along with the application. Table - 1 Sr. No. Product Description Classification adopted by NM 1. Tile Adhesive for Normal Application Entry 24 of Schedule IV 2. Glass Tile Adhesive Entry 24 of Schedule IV 3. Tile - on - Tile Application Entry 24 of Schedule IV 4. Tile Adhesive for Stone & Heavy Tile Application Entry 24 of Schedule IV 5. Cement based Tile Grout Entry 24 of Schedule IV 6. ....
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.... an adhesive for bonding of tiles. 1.9. Tile - on - Tile Application: 1.9.1. The product Tile-on-Tile Adhesive is single component white cement based polymer modified adhesives for fixing tiles over tiles on floors and walls in interiors as well as exteriors. The product contains special adhesives that provide excellent bonding & grabbing properties. The product is sold as free flowing powder. This product is mixed with water to form a slurry and is then applied on the surface (where tiles have to be fixed) using trowel. The said Surface is then combed with notch trowel and tiles are fixed. This product is used under the tiles to join the tiles together in order to provide strength to the walls, floors, etc. where the tiles are applied. It is used an adhesive for bonding of tiles. 1.10. Tile Adhesive for Stone & Heavy Tile Application: 1.10.1. The product Tile Adhesive for Stone & Heavy Tile Application is Single component white cement based polymer modified tile adhesive specially designed for heavy stone tile applications like granite, marble on internal as well as external vertical surfaces. The product is sold as free flowing powder. This product is mixed with water....
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....4 then the rate Of GST applicable will be 18% under Entry 97 of Schedule III of the said Notification No. 1/2017 - Central Taxes (Rate) dated 28.06.2017. 1) In view of the above facts, the applicant has raised the question as to whether the six products will be classifiable under Entry 24 of Schedule IV of Notification No. 1/2017- Central Taxes (Rate) dated 28.06.2017 liable to CGST at 14% or Entry 97 of Schedule III of Notification No. 1/2017 - Central Taxes (Rate) liable to CGST at 9%? Submissions: 2. The Applicant submits that by plain reading of the description of competing entries, the aforesaid six products will be classifiable under Entry 97 of Schedule Ill liable to CGST at 9%: 2.1. The Applicant submits that above six products sold by the Applicant is non refractory chemical based preparation. The said product contains predominantly cement, sand / grit and additives mixed in powder form. The said powder is converted into slurry by adding water before application. 2.2. The above six products do not have any refractory properties and hence will fall under the non-refractory category. 2.3. The Applicant submits that there are two competing entries relevant f....
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....ce as the last finishing material. The said preparations are used to give the finishing touches on the surface. Therefore, the entry refers to surfacing preparations for facades, indoor walls, floors, ceilings where final smooth finishing is required. 2.10. The Applicant submits that product of the Applicant is not used as surface preparation neither it is meant to be used as a surface preparation. 2.11. The products of the applicant such as Tile Adhesives is nothing but a mortar used for fixing the tiles for any kind of flooring or walls. The difference between the normal mortar and the tile adhesives is the negligent percentage of additive which delays the process of drying the mortar. If a mason binds the tiles with a normal mortar, then depending upon the environmental conditions, the mortar will dry up quickly. Once the mortar has dried, the mason cannot then set the tiles or remove it without damaging the tile. On the Other hand, if the mason uses the tile adhesive, the mason, the slurry remain slipper for a longer period of time and the mason can then set the tile or uproot the tile without damaging the tile. Thus, a tile adhesive basically is a mortar with an added ca....
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....f trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person, and which is registered under the Trade Marks Act, 1999. (iii) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, heading, sub-heading and Chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the said Customs Tariff Act, 1975, including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. 3.3. In view of the Explanation (iv), the Chapter Heading under consideration shall I con be interpreted on the basis of rules of interpretation of the First Schedule to the Customs Tariff Act, 1975. Before resorting to the Chapter Notes and Sub Heading Notes of the Customs Tariff Act, the relevant Tariff Items of the Customs Tariff Act are extracted below for ready reference: (A): Relevant Extract of Chapter Heading 3214: Tariff Item Description of goods Unit Rate of duty ....
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....parations are used on facades, indoor walls, floors and ceilings, swimming pool walls and floors, etc., to make them waterproof and improve their appearance. Generally they remain visible as the final surfacing. This group includes: 1. Powdered preparations consisting of equal parts of plaster and sand with plasticisers. 2. Preparations in powder form based on quartz and Cement with small, quantities of added plasticisers, used for instance, after adding water, for setting wall or floor tiles. 3. Pasty preparations made by coating minerals fillers (ground marble, quartz, or a mixture of quartz and silicate, for instance) with a binder (plastics or resins), with added pigments and, where appropriate, water or solvent. 4. Liquid preparations consisting, for instance, of synthetic rubber or acrylic polymers, asbestos fibres mixed with a pigment, and water. These are applied on facades with paint brush or spray gun and form a much thicker layer than paint. 4.1. The Applicant submits that on a plain reading of the above HSN Explanatory Notes, it can be seen that the said Chapter Heading 3214 only includes Non refractory surfacing preparations to ma....
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....for which purpose they classify diverse products, articles and substances resort should be had not to "the scientific and technical" meaning of the terms or expression used but to their popular meaning that is to say, the meaning attached to them by those dealing in them. Further, Hon'ble Supreme Court in the case of Ramavatar Bhuadaiprasad Etc. Vs. Assistant Sales Tax Officer, Akola - (1961) 12 STC 286 (SC) = 1961 (3) TMI 55 - SUPREME COURT OF INDIA held that if a word is used in a taxing statute, it has to be understood as in common parlance. 4.9. Further, Hon'ble Supreme Court in the case of Commissioner of Sales Tax, Madhya Pradesh Vs. Jaswant Singh Charan Singh - (1967) 19 STC 469 (SC) = 1967 (2) TMI 65 - SUPREME COURT OF INDIA while considering the question of whether the word "coal" covers charcoal, held that the meaning of the word 'coal' in the statute as understood in its commercial or popular sense would include "charcoal". The Apex Court upheld the decision of High Court wherein the High Court had observed that while construing entries in a statute like the Sales Tax Acts, the Court should prefer the popular meaning of the terms used in such entries and not their dic....
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....nding acid proof brick, tils, etc. for masonry construction and for lining chemical reaction equipment. 4.14. Thus, on a plain reading of the dictionary meaning of mortar, it is clear that the non-refractory tile adhesives and tile grout products sold by the applicant is used as mortar by the actual users for fixing and bonding the tiles on the walls and floorings. It is not used as a surface finishing material. Hence, the said products will be covered under the above Chapter Heading 3824 only. 5. The Applicant submits that above six products will be classifiable under Chapter Heading 3824 as per Rule 3 of the General Rules for the Interpretation of First Schedule to the Customs Tariff Act. 1975. 5.1. The Applicant further submits that even as per the General Interpretation Rules applicable to First Schedule to the Customs Tariff Act, 1975, the aforesaid six products will be classifiable under Chapter Heading 3824. 5.2. The Applicant submits that the products sold by the Applicant is mixture consisting of different goods such as cement, sand and additives. 5.3. Thus, the said products will be classifiable as per Rule 3 read with Rule 2(b) of the General Interpretatio....
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.... as trading in paint, polymers and other chemicals. Applicant has filed an application in form GST ARA-01 for advance ruling in respect of classification of goods sold by it and rate of tax applicable. The issues involved in advance ruling are as under: 1) Correct classification of manufacturing goods i.e. "tile adhesive" and "tile grout" as per HSN code Central Excise Tariff Act i.e. whether goods" are covered under HSN Code 3824 or under 3214 Of the said Act. 2) Applicability of rate of tax on good, i.e. tile adhesive and tile grout. Applicant has filed an application under advance ruling u/s 97 of GST Act stating that M/s. Asia Paints i.e. Applicant is a manufacturer of "tile adhesive & tile grout". In present situation applicant wants correct clarification regarding classification of goods as per HSN Code of Central Excise Tariff Act and rate of tax accordingly. Applicant has charged 28% on said product as per GST Act & as per HSN code 3214, but applicant has raised the issue that no such product has clearly mentioned in chapter heading of Central Excise Tariff Act and he urged that his product should fall in HSN Code 3824 instead of HSN Code 3214 and levy of ta be ....
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....ING THOSE CONSISTING OF MIXTURES OF NATURAL PRODUCTS), NOT ELSEWHERE SPECIFIED OR INCLUDED 38241000 - Prepared binders for foundry moulds or cores kg. 10% 38243000 - Non-agglomerated metal carbides mixed together or with metallic binders kg. 10% 382440 - Prepared additives for cements, mortars or concretes: 38244010 --- Damp proof or water proof compounds kg. 10% 38244090 --- Other kg. 10% 382450 - Non-refractory mortars and concretes: Applicant stated that tile adhesive is nothing but mixture of cement sand and polymer, which is used after adding water to make it in plaster form. So as per sub heading 38245010 it is a nothing but non refractory mortar and just like ready mix concrete and therefor products should fall under HSN Code 3824 and rare of tax should be 18%. After scrutiny of the document and contention of applicant along with description mention in HSN Code 3214 & 3824, this office is Of opinion that applicant has rightly charged 28 % GST as per the classification of goods under tariff heading 3214 of Central Excise t....
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....ny materials, it is considered a composite material. The various aggregates such as gravel and stones are bound together by a mixture of cement and water that hardens over time and provide strength to the concrete. Various types of concrete are produced depending on its intended purpose, including: • Portland cement concrete - This is the common concrete that is used as a building material for residential, industrial and commercial purposes. The cement used in this concrete is rich in alumina content (aluminous cement).This is a lime-based concrete. • Asphalt concrete - this type is used primarily for road construction. The role of cement in this case is played by bitumen, which tightly holds and binds the concrete composites in the presence of coal tar at high temperatures. • Polymer concrete - This type is used where the cementing material is a polymer. High temperature have the effect of weakening the bond and endangering the construction. The construction material can be cement-based or gypsum-based. Notable examples of dry mixture mortars which utilize methyl cellulose include tile adhesives, EIFS, insulting plasters, hand-troweled ....
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....able to the facts on record. Therefore in view of above deliberation the products are nothing but nonrefractory surfacing preparations used on indoor walls, floors and ceilings as a binder to provide tensile strength, large surface area, flexure strength to the tile by way of adhesive or polymer and rightly classified in heading 3214 of central excise tariff act and should be taxable at rate of 28 %. 04. HEARING The case was taken up for Preliminary hearing on dt. 18.07.2018 when Sh. Rahul Thakkar, Advocate along with Sh. Hiral Raja, G. M. Taxation & Sh. Niket Prasad Branch Manager and Sh. Ajay Patel, Sr. Manager Taxation appeared and contended for admission of application as per contentions in their ARA and oral & written submissions. Jurisdictional Officer, Sh. J. M. Raut, Dy. Commr. of Sales Tax (E-636), Large Tax Payer Unit-III, Mumbai appeared and made written submissions. The application was admitted and called for final hearing on 08.08.2018 when Sh. Rahul Thakkar, Advocate along with Sh. Hiral Raja, G. M. Taxation & Sh. Ajay Patel, Sr. Manager Taxation & Sh. Yogender Pandey appeared & made oral & written submissions. The Jurisdictional Officer was not present. ....
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....ules of interpretation of the First Schedule to the Customs Tariff Act, 1975. They have also stated that under the Customs Tariff Act, the Chapter Notes for the aforesaid Two Chapters 32 and 38 does not contain any specific Note for the above relevant Sub-Heading. Hence resort shall be made the Explanatory Notes of Harmonized System of Nomenclature published by the World Customs Organization, Brussels (HSN Explanatory Notes) to interpret the above relevant Sub-headings. The relevant portion Of the HSN Explanatory Notes is extracted below for ready reference: 32.14 - GLAZIERS' PUTTY, GRAFTING PUTTY, RESIN CEMENTS, CAULKING COMPOUNDS AND OTHER MASTICS; PAINTERS' FILLINGS; NONREFRACTORY SURFACING PREPARATIONS FOR FACADES, INDOOR WALLS, FLOORS, CEILINGS OR THE LIKE. (B) NON-REFRACTORY SURFACING PREPARATIONS. Non-refractory surfacing preparations are used on facades, indoor walls, floors and ceilings, swimming pool walls and floors, etc., to make them waterproof and improve their appearance. Generally they remain visible as the final surfacing. This group includes: (1) Powdered preparations consisting of equal parts of plaster and sand with plasticizers. (2....