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Dalochar (waste from manufacturing process) classifiable under Tariff head 2619 taxable @18%

Recently AAR gave an important ruling dated 20th September 2019, regarding GST classification of supply of Char-dolochar/dolochar suuplied by applicant in case of Jairaj Ispat Ltd. [2019] 110 taxmann.com 230 (AAR - KARNATAKA) which is discussed as below:

Facts of the Case
  • The applicant was engaged in the process of manufacturing sponge iron using iron ore & coal as a raw product. During the process, char-dolchar/dolchar emerged as waste products/by ­product. The physico-chemical properties of Dolochar reveal that it is a type of semi-coke and has poor wash ability.
Issue Involved
  • Whether the char-dolochar/dolochar supplied by applicant  is classifiable under Tariff Item 2621 90 90 of Customs Tariff Act, 1975 and therefore, in view of Entry 30 of Schedule III of Notification 1/2017-Integrated Tax (Rate), attract a levy of 18%? 
Observation/ Judgment
  • Tariff Item 2701 20 90  covers  Other Briquettes, ovoid and similar solid fuels manufactured from coal. Where in briquette or ovoid or similar solid fuel manufactured from coal only. Hence dolochar does not fall under sub heading 2701 20 90.
  • Tariff Item 2621 90 90 of Customs Tariff Act, 1975 covers slag, dross (other than granulated slag), scaling and other waste from the manufacture of iron or steel. Hence by-­product supplied by the applicant is classifiable under this Tariff and attract IGST at the rate of 18%.

Please click here for Ruling.

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