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2019 (2) TMI 1908 - AAR - GSTClassification of imported goods - airsprings - whether classifiable under HSN Heading 8607 (i.e. parts of coach work of railway running stock) and thus covered under Entry No. 241 of Schedule-I of the GST rate notifications or otherwise? - applicable rate of tax under GST. Whether airsprings imported by the applicant are classifiable under HSN Heading 8607? - HELD THAT - As per specification provided In air suspension system, properties of air are used for cushioning effect. Enclosed pressurized air in a rubber below is called airsprings. Therefore, as per the submission, technical specifications and characteristics mentioned by the party in respect of airspring it appears that the goods in question are air below made of rubber to be used in spring - The jurisdictional AC, CGST Div-II, Noida also submitted that the party s assumption is not acceptable as the disputed goods are made of rubber and the articles of vulcanized rubber are excluded from Chapter 86 as per Section Note 2(a) to Section XVII. After considering the submissions made by the applicant and jurisdictional office it is observed that it is not appropriate to classify the goods in question under the Heading 8607. Applicable rate of GST - HELD THAT - As the answer to the first question is in negative, second question cannot be considered. Scope of Advance Ruling application - HELD THAT - The question is out of the purview of the mandate of the Advance Ruling u/s. 95(a) which provides that - advance ruling means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of Section 97 or sub-section (1) of Section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. Correct classification of goods - applicable rate of tax under GST Notification - HELD THAT - The classification of the goods in question shall be the same as classified under the Customs Tariff Act, 1975 and shall be interpreted in terms of the Customs Tariff Act, 1975 for classifying any goods under the Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017. Since, the goods in question is classified under Chapter Heading 4016 95 90 under the Customs Tariff, it has to be appropriately classified under the same chapter i.e. 4016 for levying of tax under GST not under the Chapter Heading 8607 - Further, as per specification provided by the applicant In air suspension system, properties of air are used for cushioning effect. Enclosed pressurized air in a rubber below is called airspring. Therefore, as per the submission, technical specifications and characteristics mentioned by the party in respect of airspring it appears that the disputed articles are air below made of rubber to be used in airspring. Furthermore, as per the specification requirement for emergency rubber springs used in airsprings The emergency rubber bumper used in the airspring should be manufactured from natural rubber suitably compounded to conform to the requirements stipulated in STR (Schedule of Technical Requirements). Thus, the process of making compounded rubber is none other than vulcanized rubber. Vulcanization makes rubber much stronger, more flexible, and more resistant to heat and other environmental conditions - the goods in question are made of rubber and the articles of vulcanized rubber which are excluded from Chapter 86 as per Section Note 2(a) to Section XVII, the party s assumption is not acceptable and the correct classification of the airsprings would be 4016 95 90 and rate as per the Notification No. 1/2017-Central Tax (Rate) will be 18%. Scope of Advance Ruling application - Whether the applicant can also be eligible for classifying imported goods under HSN Heading 8607 like its competitors? - HELD THAT - It is again out of the purview of the mandate of the Advance Ruling u/s. 95(a) which provides that advance ruling means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of Section 97 or sub-section (1) of Section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.
Issues Involved:
1. Classification of imported airsprings under HSN Heading 8607. 2. Applicable rate of tax under GST notifications if classified under HSN Heading 8607. 3. Classification of competitors' airsprings under HSN Heading 8607. 4. Correct classification and applicable tax rate if not classified under HSN Heading 8607. 5. Eligibility for classifying imported goods under HSN Heading 8607 like competitors. Detailed Analysis: Issue 1: Classification of imported airsprings under HSN Heading 8607 The applicant sought a ruling on whether the airsprings imported for manufacturing air-spring assemblies for Indian Railways are classifiable under HSN Heading 8607, which pertains to parts of coach work of railway running stock. The applicant argued that these airsprings are custom-made for railway coaches and have no other usage, thus fitting the description under HSN 8607. However, the jurisdictional GST Officer and the Authority for Advance Ruling (AAR) disagreed, stating that the airsprings are made of rubber, and as per Section Note 2(a) to Section XVII of the Customs Tariff Act, articles of vulcanized rubber other than hard rubber are excluded from Chapter 86. Consequently, it was ruled that it is not appropriate to classify the airsprings under Heading 8607. Issue 2: Applicable rate of tax under GST notifications if classified under HSN Heading 8607 Since the classification under HSN Heading 8607 was negated, this issue became moot and was not considered further. Issue 3: Classification of competitors' airsprings under HSN Heading 8607 The applicant queried whether the airsprings imported by its competitors are classifiable under HSN Heading 8607. The AAR ruled that this question is out of the purview of the mandate of Advance Ruling as per Section 95(a) of the GST Act, which limits the scope to the supply of goods or services by the applicant. Issue 4: Correct classification and applicable tax rate if not classified under HSN Heading 8607 Upon determining that the airsprings do not fall under HSN Heading 8607, the AAR examined the correct classification. It was found that the airsprings, being made of vulcanized rubber, should be classified under Chapter Heading 4016, specifically under Tariff Item 4016 95 90. The applicable rate of GST for this classification is 18% (9% CGST + 9% SGST), as per Notification No. 1/2017-Central Tax (Rate). Issue 5: Eligibility for classifying imported goods under HSN Heading 8607 like competitors Similar to Issue 3, this question was deemed out of the purview of the mandate of Advance Ruling under Section 95(a), and thus was not addressed. Ruling: 1. It is not appropriate to classify airsprings under Heading 8607. 2. The answer to the first question is negative. 3. Questions regarding the classification of competitors' imports and eligibility for similar classification are out of the purview of Advance Ruling under Section 95(a). 4. The correct classification of the airsprings is under Tariff Item 4016 95 90, with an applicable GST rate of 18% (9% CGST + 9% SGST).
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