Classification Disputes Triggered By The Complexities In The GST Regime

The Goods and Services Tax ('GST') Law completed five (5) years in July this year, however, many issues are yet to be settled and some issues that were presumed to be settled are now unsettled. One of the major areas of controversies is the classification of goods and services. Classification disputes have been in vogue since time immemorial, and in the present regime, Authority for Advance Rulings ('AARs') have misbalanced many established positions by pronouncing contradictory rulings, thus adding to the woes of the industry.

Though, HSN classification has been adopted from internationally accepted commodity description and coding system developed by the World Customs Organization, nevertheless, it does leave doubt around the interpretation of relevant headings and Chapters in many cases. Because of such ambiguity and change in stand by authorities, industry has witnessed interesting rulings around the classification of goods under GST, specifically related