Rajasthan AAR: Rubberised Cork Sheets Classified Under Tariff Item 4504 10 10 — 5% GST Applicable
Overview of the Ruling
The Rajasthan Authority for Advance Ruling (AAR) has pronounced a significant ruling in the matter of In re Balasaria Agencies Pvt. Ltd. (GST AAR Rajasthan), vide Advance Ruling No. RAJ/AAR/2026-27/16 dated 19/08/2026, settling the classification dispute surrounding rubberised and agglomerated cork sheets manufactured and supplied by the applicant operating under the trade name M/s Pristine Technologies & Industries.
The core controversy centred on whether such composite cork-based industrial sheets — containing polymer as a substantial ingredient — would fall under Chapter 45 (Cork and articles of cork) at 5% GST or under Chapter 40 (Rubber and articles thereof) at 18% GST. The AAR conclusively ruled in favour of classification under Tariff Item 4504 10 10, making the product eligible for the concessional 5% GST rate under Sr. No. 310 of Schedule-I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025, effective for supplies made on or after 22.09.2025.
About the Applicant and the Product
M/s Balasaria Agencies Pvt. Ltd., registered under GST bearing GSTIN 08AACCB3334K2ZQ, is a Jaipur-based manufacturer operating from Plot No. F-163 and 164, Industrial Area, Jhotwara Extension Second Phase, Sarnadoongar, Jaipur, Rajasthan — 302012. The company produces:
- Rubberised Cork Sheets
- Agglomerated Cork Sheets
- Rubberised Cork Frames
- Agglomerated Cork Strips
These products serve industrial purposes including sealing, gasketing, vibration damping, thermal insulation and related engineering applications.
Raw Materials Procured
The applicant sources the following inputs for its manufacturing process:
- Cork Granules
- Polymer / Rubber
- Chemicals and Curatives
- Processing Oil
- Fillers
Manufacturing Process
The production sequence followed by the applicant involves:
- Procurement and quality inspection of raw materials
- Controlled mixing of cork granules with polymer/rubber and chemical additives
- Homogenisation of the blend
- Compression moulding into sheet or block form
- Vulcanisation and curing
- Cutting, finishing, quality inspection and packing
Composition of Finished Product
As declared in Annexure-1 to the application, the typical composition of the finished product is as follows:
| Constituent | Percentage |
|---|---|
| Cork | 30.99% |
| Polymer | 42.47% |
| Chemicals & Curatives | 17.33% |
| Processing Oil | 7.29% |
| Fillers | 1.91% |
| Total | 100.00% |
Questions Raised Before the AAR
The applicant sought advance rulings on five questions:
- Q1: Whether Rubberised Cork Sheet / Agglomerated Cork Sheet is correctly classifiable under Tariff Item 45041010?
- Q2: Whether goods classified under Tariff Item 45041010 are covered by Sr. No. 310 of Schedule-I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025?
- Q3: Whether GST at 5% (CGST @ 2.5% + SGST @ 2.5%) applies to the said product?
- Q4: Whether the benefit of the said notification can be withheld merely on the ground that the finished product is not natural cork or that the cork does not retain its natural botanical character?
- Q5: Whether the applicant is entitled to refund under inverted duty structure under
Section 54(3)(ii)of the RGST Act, 2017?
Applicant's Classification Arguments
Heading 4504 Expressly Covers Agglomerated Cork with Binders
The applicant drew attention to the express wording of heading 4504 of the Customs Tariff Act, 1975, which reads:
"Agglomerated cork (with or without a binding substance) and articles of agglomerated cork."
Tariff Item 4504 10 10 specifically covers: "Agglomerated Cork — Blocks, Plates, Sheets and Strips."
Since the tariff heading itself contemplates the presence of a binding substance, the incorporation of polymer or rubber into the product cannot be a basis to exclude it from Chapter 45. The applicant contended that once a specific heading covers the goods, no other heading can be applied — this flows from Rule 1 of the General Rules for Interpretation of the Customs Tariff, which mandates that classification be determined first by the terms of the headings and relevant Section or Chapter Notes.