The Authority for Advance Ruling ( AAR ), Maharashtra recently held that Caesarstone Quartz Surface is classifiable under HSN Code 6810 and is liable to tax at the rate of 18%.
The applicant, Hafele India Private Limited, is engaged in the business of importation of kitchen and bathroom fittings along with furniture and other home accessories. The applicant imports Caesarstone Quartz Surfaces and is liable to pay Basic Customs Duty and Integrated Goods and Services Tax (IGST) under Customs Tariff Act, 1975 on goods cleared for consumption. In certain cases, there were inconsistencies in classification of the Caesarstone resulting in a situation wherein the goods could be classified in a different heading for import whereas the same may fall in the different entry under the respective states schedule for levy of tax on outward supply. In order to solve this ambiguity, the applicant has approached the authority for correct classification of the Caesarstone.
The applicant claimed that the classification should be under the entry Quartz (other than natural sands) HSN Code 2506 at the rate of 5%, as Caesarstone contains 93% crushed quartz. He contends that as per 2(a) of the General Rules for Interpretation, a reference to a material substance shall be taken to include a reference to mixture or combination of that material or substance with other material or substances. He also pointed out that as per rule 3(b) mixtures, composite goods that consist of different materials or are made up of different components shall be classified as such material or component that gives the product its essential character.
However, the Authority comprising of members B.V. Borhade & Pankaj Kumar observed that Caesarstone is in the nature of an Engineered Stone that falls under the HSN Code 6810 and is taxable at 18%.
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