Excelsior Correspondent
JAMMU, Dec 1: Federation of All India Vyapar Mandal (FAIVM) has requested Central Board of Indirect Taxes and Customs to remove the discrepancy which has caused two rates of GST on a single item.
In a letter written to Chairman, CBIC and all field Zonal GST Chief/Principal Commissioners, with a copy to all members of GST Council, FAIVM has quoted that writing pen, other than fountain pen and stylograph pens, falls under heading 9608 and attracts 12 percent GST rates. However, some of field officers from GST are insisting cap manufacturers, integral part of pen, to apply 18 percent GST rates by bringing it to residuary entry.
V K Bansal, National General Secretary of FAIVM, said that pen is a set of Barrels, Cap, and Refills and by combining these three, pen becomes a marketable item. Therefore, he added, it should be taxed at 12 percent as prescribed in Schedule-II with tariff heading 9608. Customs Tariff Act also recognizes parts of pen as per description provided in First Schedule to the Customs Tariff Act. There is no ambiguity in law, but department is taking some different interpretation of GST provisions,” he explained.
Naresh Jalan, President of Calcutta Pen Manufacturers and Dealers Association, said that as per Government launched “Niryat Mitra” App, IGST rate for all goods falling under various sub-headings of heading 9608 attracts 12 percent IGST, other than Fountain Pens and Stylograph pen (covered under sub-heading 960830) which attract 18 percent IGST.
Naresh Jalan further pointed out that on the web portal “Indian Trade Portal”, IGST rate on all items falling under sub-headings of 960860, 960891 and 960899 has been given at 12 percent. He further said that it is settled legal principle that classification of goods under residuary entry should be taken as the last resort.
Jayendra Tanna, President, Federation of All India Vyapar Mandal said that if parts of pen are taxed at 18 percent and final product “Pens” are taxed at 12 percent , it will create an inverted duty structure position and traders will start importing finished pens instead of imports of parts for assembling / manufacturing of pens here in our country.
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