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2018 (6) TMI 517 - AAR - GSTClassification of goods - Electrically operated Drum with Bell and Zalar - whether the said product is eligible for exemption vide Sl. No. 143 of N/No. 2/2017-Central Tax (Rate), dated 28-6-2017 issued under the Central Goods and Services Tax Act, 2017 and corresponding Notification issued under the Gujarat Goods and Services Tax Act, 2017, which provided exemption to Indigenous handmade musical instruments of Chapter 92? Held that - The product manufactured by the applicant is distinctly known in the market as Electrically operated Drum with Bell and Zalar and the Drum, Bell and Zalar used in the said product are played in a rhythm by mechanical operation of electric motor run by electricity - the said product is appropriately classifiable under Heading 9208 of the First Schedule to the Customs Tariff Act, 1975, which inter-alia covers the products musical boxes, fairground organs, mechanical street organs, mechanical singing birds, musical saws and other musical instruments not falling within any other heading of Chapter 92. The exemption vide Sl. No. 143 of the said Notification is now admissible only to those indigenous handmade musical instruments of Chapter 92 as are listed in Annexure-II of the said Notification - The said product do not correspond to the description Getchu Vadyam or Jhallari mentioned at Sr. 4 or Gethu or Jhallari mentioned at Sr. 43, or Nagara pair of Kettledrums mentioned at Sr. 113 of Annexure II of N/N. 2/2017-Central Tax (Rate), dated 28-6-2017, as amended, as claimed by the applicant, or to any other items of said Annexure II. As Page 4 of 5 the list of indigenous handmade musical instruments given in Annexure-II of N/N. 2/2017-Central Tax (Rate) is exhaustive and the wordings of Entry at Sl. No. 143 of said Notification are very clear, the benefit of Sl. No. 143 of Notification No. 2/2017-Central Tax (Rate), dated 28-6-2017 is not admissible to the product Electrically operated Drum with Bell and Zalar manufactured and supplied by the applicant. Also, the Sl. No. 143 of Notification No. 2/2017-Central Tax (Rate), dated 28-6-2017, as amended, is not pari-materia to Entry 43 under the Gujarat VAT Act. Therefore, the Determination Order issued in respect of Entry 43 of the Gujarat VAT Act, is not found to be applicable in the present case. Ruling - The product Electrically operated Drum with Bell and Zalar manufactured and supplied by the applicant is classifiable under Heading 9208 of the First Schedule to the Customs Tariff Act, 1975 - the product is not eligible for exemption provided vide Sl. No. 143 of N/N. 2/2017-Central Tax (Rate), dated 28-6-2017, as amended, issued under the Central Goods and Services Tax Act, 2017 and corresponding Notification issued under the Gujarat Goods and Services Tax Act, 2017.
Issues Involved:
1. Appropriate classification of the product ‘Electrically operated Drum with Bell and Zalar’. 2. Eligibility of the product for exemption under Sl. No. 143 of Notification No. 2/2017-Central Tax (Rate). Detailed Analysis: 1. Classification of the Product: The applicant, M/s. Shree Vishwakarma Engineering Works, manufactures an 'electrically operated drum with bell and zalar'. The product involves the use of lathe, drill, and welding machines for preparing the body, but the final assembly is done manually. The applicant argues that the product should be classified under Chapter 92 of the GST Tariff, which pertains to musical instruments, parts, and accessories. They claim the product is an indigenous handmade musical instrument, thus qualifying for a NIL rate of GST. The ruling considers the product's description and market recognition. It observes that the product is known as 'Electrically operated Drum with Bell and Zalar' and operates mechanically via an electric motor. The relevant tariff heading is 9208, which includes mechanical musical instruments not classified elsewhere in Chapter 92. Therefore, the product is classified under Heading 9208 of the First Schedule to the Customs Tariff Act, 1975. 2. Eligibility for Exemption: The applicant contends that the product should be exempt from GST under Sl. No. 143 of Notification No. 2/2017-Central Tax (Rate), which exempts indigenous handmade musical instruments listed in Annexure II. They argue that their product meets the criteria of being handmade and indigenous, referencing definitions from dictionaries and previous legal interpretations. The ruling examines the specific entries in Annexure II of the Notification, which lists exempt instruments. The product does not match any listed items such as 'Getchu Vadyam or Jhallari' or 'Nagara – pair of Kettledrums'. The list is exhaustive, and the product does not fit any of the specified categories. Additionally, the ruling notes that the exemption list under the GST Act is not equivalent to Entry 43 under the Gujarat VAT Act, making prior determinations under the VAT Act inapplicable. Conclusion: The ruling concludes that: - The product 'Electrically operated Drum with Bell and Zalar' is classified under Heading 9208 of the Customs Tariff Act, 1975. - The product is not eligible for the GST exemption under Sl. No. 143 of Notification No. 2/2017-Central Tax (Rate), as it does not correspond to any items listed in Annexure II of the Notification. Ruling: (i) The product ‘Electrically operated Drum with Bell and Zalar’ is classifiable under Heading 9208 of the First Schedule to the Customs Tariff Act, 1975. (ii) The product is not eligible for exemption under Sl. No. 143 of Notification No. 2/2017-Central Tax (Rate), as amended, issued under the Central Goods and Services Tax Act, 2017, and corresponding Notification under the Gujarat Goods and Services Tax Act, 2017.
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