Question23:

As per Notification No. 6/2018-Central Tax (Rate) dated the 25th January, 2018 , the notification no.1/2017 as been amended hence dispute might get come into picture when office classify unworked  Semi precious Items in finished semi precious itmes @ 3% For `Semi-precious stones finished is chargable to 3% but in the below mentioned (E) schedule V -1.5% interest at Sr. no.2 as`Semi-precious stones, whether or not worked or graded but not strung, mounted or set; semi-precious stones, temporarily strung for convenience of transport “ , And in   (F) in Schedule-VI - 0.125%,  of the above notification is has been mentioned  `Semi-precious stones, unworked or simply sawn or roughly shaped` substituted Now our question is whether what is the definition of , `Semi-precious stones, unworked And Semi precious stone whether or not worked It might be possible tax officer classify our product in FINISHED Semi - precious stone and charged duty as per Schedule V @ 3%  How will we overcome from this problem. The Relevant entry has been mentioned for reference

(E) in Schedule-V-1.5%, -
(i) S. No. 2, and the entries relating thereto, shall be omitted;
(ii) in S. No. 3, for the entry in column (3), the entry `Semi-precious stones, whether or not worked or graded but not strung, mounted or set; semi-precious stones, temporarily strung for convenience of transport [other than Unworked or simply sawn or roughly shaped]` shall be substituted;

(F) in Schedule-VI - 0.125%, -
(ii) in S. No. 2, for the entry in column (3), the entry, `Semi-precious stones, unworked or simply sawn or roughly shaped` shall be substituted;

Answer 

Reply to your question is as under;

After amendment of Notification No. 1/2017-CT(R) dated 28.6.2017 vide Notification No. 6/2018-CR (R) dated 25.1.2-2018, the description of the goods against entry No. 3 in Schedule V and entry no. 2 in Schedule VI underwent change. The new entries read as under;

(E) in Schedule-V-1.5%, -
(ii) in S. No. 3, for the entry in column (3), the entry 'Semi-precious stones, whether or not worked or graded but not strung, mounted or set; semi-precious stones, temporarily strung for convenience of transport [other than Unworked or simply sawn or roughly shaped]' shall be substituted;

(F) in Schedule-VI - 0.125%, -
(ii) in S. No. 2, for the entry in column (3), the entry, 'Semi-precious stones, unworked or simply sawn or roughly shaped' shall be substituted;

The language employed in the above referred descriptions makes it amply clear that the under the said entries different types of semi-precious stones have been covered. When semi-precious stone are in raw shape i.e they have not been worked upon or are in rough shape, then lower rate of tax i.e.0.125% would be attracted and would be classifiable under Scgedule VI of Notification No. 1/2017-CT (R) dated 26.6.2017

Alternatively, when the semi-precious stone have been worked upon or are graded then such semi-precious stones would attract higher rate of tax i.e. 1.5%.
(REPLY dt. 26/02/2018)