2019 (11) TMI 1582 - AAR - GST

Classification of goods - Seats Berth for the Railways Running Stock - the Coaches - HELD THAT - In the instant case, it is observed that the seats/berth would be manufactured by the applicant, strictly as per the specification and design provided by the Indian Railways and specially meant to be solely used in railway coaches and nowhere else. The seats and berths are the interior fittings inside the Coach and they are suitably classified under Tariff Heading 8607 99 10 i.e. Parts of Coach work of Railways running stock .

Summary

Issues: Classification of Seats & Berth for Railway Coaches under GST Tariff.

Analysis:
The applicant, a partnership firm engaged in manufacturing locomotive and coach parts, sought an advance ruling on the correct classification of seats and berths for railway coaches. The applicant contended that the seats and berths, manufactured as per railway-approved drawings, should be classified under Chapter Heading 8607 as parts of Coach Work. They supported their claim with purchase orders from Indian Railways and relevant tariff headings. The applicant's application raised the issue of classification under Chapter 86 of the GST Tariff, specifically regarding the seats and berths meant for railway coaches.

The Authority for Advance Ruling admitted the application for consideration on merits under Section 97(2)(a) of the CGST Act, 2017. They analyzed Chapter 86 of the GST Tariff, noting that it covers Railway Locomotives, Rolling-Stock, and related parts. The Chapter Note 2 of Chapter 86 specifies that it includes coachwork, which is crucial for determining the classification of seats and berths for railway coaches. The Authority examined previous tribunal decisions, such as Commissioner of Central Excise v. Sri Ram Metal Works, to establish that items integral to the coach's function are appropriately classified under Chapter 86.07.

By applying the principles from past judgments, the Authority found that seats and berths, designed as per railway specifications and solely for use in railway coaches, fall under Chapter 86.07 of the GST Tariff. They emphasized that the seats and berths are interior fittings integral to the coach, supporting their classification under Tariff Heading 8607 99 10. The ruling concluded that the applicant's manufactured seats and berths, exclusively for railway use, are appropriately classified under Chapter 86.07 of the GST Tariff, ensuring clarity and avoiding future disputes on classification.

In the final ruling, the Authority declared that the seats and berth's classification, manufactured as per railway specifications and supplied exclusively to railways, falls under Chapter 86.07 of the GST Tariff. The ruling remains valid unless declared void under relevant provisions of the CGST Act, 2017.