Legal analysis: VAT should be levied on the fly ash (slag) produced and sold by taxpayers according to the applicable VAT rate, and it should not be exempted from VAT, nor should it be levied in a simple way.

Legal basis: Reply of State Taxation Administration of The People's Republic of China on the Issue of Value-added Tax on Fly Ash (Slag) Shenzhen State Taxation Bureau:

Your Request for Instructions on Value-added Tax on Fly Ash (Slag) (No.173 [26] of Shen Guo Shui Fa) has been received. After research, the reply is as follows:

Fly ash (slag) is the residue after coal combustion, which can be used as raw materials for some building materials products, belonging to waste residue products, not building materials products. The fly ash (slag) produced and sold by taxpayers does not belong to the scope of products exempted from value-added tax stipulated in the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Exempting Value-added Tax from Some Resources Comprehensive Utilization Products (Caishui [1995] No.44), nor does it belong to the scope of products exempted from value-added tax according to simple methods stipulated in the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Adjusting the VAT rate of agricultural products and exempting some items from value-added tax (Caishuizi [1994] No.4). Value-added tax shall be levied on the fly ash (slag) produced and sold by taxpayers according to the applicable rate of value-added tax, and shall not be exempted from value-added tax, nor shall it be levied according to the simple method.