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2018 (6) TMI 624 - AAR - GSTClassification of goods - Ice Cream Making Machines - rate of GST - Whether the aforesaid goods fall under Chapter Heading 8438 of GST Tariff? - Whether the applicant is liable to pay GST at the rate of 18% on supply of goods in question? - Held that - It is evident that the Explanatory Notes for Tariff Heading 8418 includes ice-cream makers - It is also observed that in the First Schedule to the Customs Tariff Act, 1975, industrial ice cream freezer is mentioned against Tariff Item 8418 69 50 under Tariff Heading 8418. Therefore, Ice Cream Making Machine manufactured and supplied by the applicant merit classification under Tariff Heading 8418. The Tariff Heading 8438 covers the machinery not specified or included elsewhere in Chapter 84, for the industrial preparation or manufacture of food or drink. As the Ice Cream Makers are specifically covered under Tariff Heading 8418, the same do not fall under Tariff Heading 8438. Applicant has relied in the case of Milk Food Ltd. Vs. Collector of Customs, New Delhi 1994 (3) TMI 175 - CEGAT, NEW DELHI , where it was held that The goods covered under the Bill of Entry No. 7516 have been described as enrober machine, conveyor system and coating & hardening tunnel ; claiming assessment of enrober machine under Heading 8438.80 (read with Notification No. 59/87-Cus.) and coating hardening tunnel under Heading 8418.69 (read with Notification No. 59/87-Cus.) - It is not the case of the applicant that the Ice Cream Making Machines manufactured and supplied by them consists of the above referred products, which were the subject matter of dispute in the case of Milk Food Ltd. Therefore, the said decision is not found to be applicable in the facts of the present case. Ruling - The product Ice Cream Making Machine is classifiable under Tariff Heading 84.18 and not under Tariff Heading 84.38 of the Customs Tariff Act, 1975 and Goods and Services Tax rate applicable to Tariff Heading 84.18 is applicable to the said product.
Issues Involved:
1. Classification of 'Ice Cream Making Machine' under the GST Tariff. 2. Applicable GST rate for the supply of 'Ice Cream Making Machine'. Detailed Analysis: 1. Classification of 'Ice Cream Making Machine' under the GST Tariff: The applicant, M/s. Mitora Machinex Pvt. Ltd., argued that their 'Ice Cream Making Machines' should fall under Chapter Heading 8438 of the GST Tariff, which pertains to "Machinery, not specified or included elsewhere in this Chapter, for the industrial preparation or manufacture of food or drink, other than machinery for the extraction or preparation of animal or fixed vegetable fats or oils." They contended that their machines are designed for manufacturing ice cream, a food product, and thus should be classified under this heading, which attracts a GST rate of 18%. However, the Authority for Advance Rulings (AAR) considered the submissions and referred to the descriptions and explanatory notes of the relevant tariff headings. The AAR noted that Tariff Heading 8418 covers "Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps other than air conditioning machines of heading 8415." The explanatory notes under Heading 8418 specifically include ice-cream makers. The AAR further observed that the First Schedule to the Customs Tariff Act, 1975, lists 'industrial ice cream freezer' under Tariff Item 8418 69 50, indicating that such machines are classified under Heading 8418. Consequently, the AAR concluded that the 'Ice Cream Making Machine' manufactured and supplied by the applicant merits classification under Tariff Heading 8418. 2. Applicable GST rate for the supply of 'Ice Cream Making Machine': The applicant argued that since their machines fall under Chapter Heading 8438, they should attract a GST rate of 18%. They supported their contention by referring to previous decisions, such as the case of Milk Food Ltd. Vs. Collector of Customs, New Delhi, where similar machinery was classified under sub-heading 8438 of the Customs Tariff Act, 1975. However, the AAR found that the specific case cited by the applicant involved different products (product forming, conveyor system, and freezing tunnel) and was not directly applicable to the 'Ice Cream Making Machines' in question. The AAR also reviewed other cited cases but determined that they were not relevant to the current classification issue. The AAR concluded that since 'Ice Cream Making Machines' are classified under Tariff Heading 8418, they do not fall under Heading 8438. The GST rate applicable to Tariff Heading 8418, as per the relevant notifications, should be applied to the 'Ice Cream Making Machines'. Ruling: The AAR ruled that the product 'Ice Cream Making Machine' is classifiable under Tariff Heading 84.18 and not under Tariff Heading 84.38 of the Customs Tariff Act, 1975. Consequently, the GST rate applicable to Tariff Heading 84.18 is applicable to the said product.
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