Page 173 - GSTL_7th May 2020_Vol 36_Part 1

2020 ] IN RE : FLINT GROUP INDIA PRIVATE LIMITED 131
4. Paints and varnishes (including enamels and lacquers) based 3208 90 11
on synthetic polymers or chemically modified natural poly-
mers, dispersed or dissolved in a non-aqueous medium; solu-
tions as defined in Note 4 to this Chapter - based on Cellulose
nitrate or other Cellulose derivatives, nitrocellulose lacquers

(v) Accordingly, in GST Regime, Printing ink (both black & oth-
ers), whose HSN Code is 3215 11 90, the GST rate is CGST 6%; SGST 6%
& Inter-State IGST 12%, whereas Varnish whose HSN Code is 3208 90 11,
the GST rate is CGST 14%; SGST 14% & Inter-State IGST 28%. M/s. Flint
Group stated that Varnish and Medium are liquid used in printing ink of
packaging material. When the uniform rate of duty of Excise for Var-
nishes, Medium and Printing ink, which was in existence, is increased by
GST Council and different rates are fixed for Paints and Varnishes, it will
have effect on the manufacturers who are taking ITC. In view of this,
Varnish and Medium are liquid used in printing ink, they need not have
the same HSN code just like printing ink.
(vi) Manufacturing process of Printing ink, the final product of
M/s. Flint Group India Pvt. Ltd. :
Ingredients of Printing ink is Solvent, Resin and various colours.
The solvent, i.e. liquid organic compound (Tolune, Methyl Ethyl Ketone
etc.,) is a clear, colourless liquid; this is transferred through pipes and at
a certain temperature resin is added to this solvent; resin is a binding
material which is also a polymer product; this mixture after undergoing
heating and cooling processes, is called as Technical Varnish; Colouring
material, is added to this mixture, and after undergoing certain process-
es, the final product i.e. Printing ink/Packaging ink emerges.
(vii) Technical varnish is intermediatery product and is the base
material of Printing ink. M/s. Flint Group, clears printing ink and some-
times, depending upon the need, also supplies “technical varnish” to
their customers. When M/s. Flint Group India P. Ltd. is supplying
“technical varnish” alone, then they use the term “Medium”. The term
“technical varnish” is used by M/s. Flint Group, when it is used as in-
termediatory product i.e. in their further process. Thus, “Medi-
um”/“Technical varnish” is independent product and is being sold to
“printing industries”. As such, “medium” and “printing ink” are having
separate identity.
(viii) HSN Code of Printing ink (both black & others) is 3215 11 90
and their GST rate is CGST 6%, SGST 6% & Inter-State IGST 12%, where-
as HSN Code of “Technical Varnish” is 3208 90 11 and their GST rate is
CGST 14%, SGST 14% & Inter-State IGST 28%. The GST rate of “Tech-
nical Varnish” is higher than “Printing ink”. Classifying “Technical var-
nish”/“medium” and “printing ink” in the same HSN is not correct.
Discussion & findings :
5. We have considered the submissions made by the applicant in their
application for advance ruling and additional submissions made vide letter dat-
ed 12-9-2018 as well as submissions made at the time of personal hearing held on
14-6-2018. We have also considered the information and views submitted by the
Central Goods and Services Tax Commissionerate, Vadodara-II.
GST LAW TIMES  7th May 2020  173