Gujarat HC Rules 5% GST Rate for Fly Ash Bricks and Blocks as per the Notification No. 24/2018, sets aside Previous 18% Classification [Read Order]
The bench held that the products manufactured by the petitioner are liable to levy of GST @ 5% as per the Notification No. 24/2018 dated 31.12.2018
![Gujarat HC Rules 5% GST Rate for Fly Ash Bricks and Blocks as per the Notification No. 24/2018, sets aside Previous 18% Classification [Read Order]](https://www.taxscan.in/wp-content/uploads/2024/11/GST-Gujarat-High-Court-Gujarat-HC-GST-Rates-GST-on-Fly-Ash-Blocks-TAXSCAN.jpg "Gujarat HC Rules 5% GST Rate for Fly Ash Bricks and Blocks as per the Notification No. 24/2018, sets aside Previous 18% Classification [Read Order]")
In a recent ruling, the Gujarat High Court ruled that fly ash bricks and blocks are subject to a 5% GST rate, as specified in Notification No. 24/2018, overturning the previous classification that imposed an 18% GST rate. The petitioner is engaged in the manufacturing and selling of Fly Ash Bricks and Fly Ash Blocks. Fly Ash Bricks are cast in moulds hence are always of uniform shape. Be...
In a recent ruling, the Gujarat High Court ruled that fly ash bricks and blocks are subject to a 5% GST rate, as specified in Notification No. 24/2018, overturning the previous classification that imposed an 18% GST rate.
The petitioner is engaged in the manufacturing and selling of Fly Ash Bricks and Fly Ash Blocks. Fly Ash Bricks are cast in moulds hence are always of uniform shape.
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Following the introduction of the Goods and Services Act in 2016, Fly Ash Bricks and Fly Ash Blocks were initially classified under Notification No. 1/2017 (CGST-Rate) dated 28.06.2017, with a GST rate of 12% (Sr. No. 177) from 01.07.2017 to 14.11.2017. However, on 14.11.2017, Notification No. 41/2018 amended this classification, removing "Fly Ash Bricks" from Entry No. 177 and creating Entry No. 225A, setting the GST rate for Fly Ash Bricks at 5%. The petitioner later filed for an advance ruling on 22.01.2019 to clarify the applicable tax rate for their manufactured Fly Ash Bricks and Fly Ash Blocks.
The Advance Ruling Authority ( AAR ), in its order dated 02.07.2020, classified Fly Ash Blocks under Entry No. 225B of Schedule-I, making them subject to 5% GST after 01.01.2019. However, it classified Fly Ash Bricks, with less than 90% fly ash content, under Entry No. 453 of Schedule III, imposing an 18% GST rate from the same date.
Although an appeal was filed before the Appellate Authority, it was rejected.
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The counsel on behalf of the assessee contended that the AAR and Appellate Authority incorrectly imposed an 18% GST on the product by applying a 90% tile content condition under Entry No. 453. He stated that the GST Council had recommended a 5% rate for Fly Ash Bricks, clarified by CBIC Notification No. 179/11/2022-GST dated 03.08.2022, which specifies the 90% content rule applies only to fly ash aggregate, not Fly Ash Bricks. Thus, the correct GST rate should be 5%.
The High Court bench comprising of Justice Bhargav D. Karia and Justice Mauna M. Bhatt allowed the petition and quashed and set aside the orders passed by the AAR and the Appellate Authority.
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The High Court held that “ products manufactured by the petitioner i.e. Fly Ash Bricks and Fly Ash Blocks are liable to levy of GST @ 5% as per the Notification No. 24/2018 dated 31.12.2018. The rule is made absolute to the aforesaid extent.”
To Read the full text of the Order CLICK HERE
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