2019 (3) TMI 921 - AAR - GST

Classification of goods - Rate of tax - VAYA TYFFN (lunch boxes) and VAYA Drynk (bottle) - N/N. 01/2017- Central Tax (Rate) dated 28/06/2017 as amended from time to time - Held that - In the case at hand, the products Vaya Tyffn and Vaya Drynk are made using double walled vaccum designed to keep the food/drink at the desired temperature for reasonable period of time. These are utensils for household items made of stainless steel, they are more specifically covered vacuum vessels capable of retaining the food/drink at a particular temperature. Rule 3(a) of General Rules for the interpretation of import tariff states that the heading with the more specific description shall be preferred. Further, Explanatory notes for heading 7323 of HSN provides that this group comprises a wide range of iron or steel articles, not more specifically covered by other headings of the Nomenclature which in this case is under heading 9617. Vaya Tyffn and Vaya Drynk are double walled stainless steel articles which perform temperature retention and are more specifically classified under Heading 96170019. The goods are chargeable to 14% CGST and 14% SGST as per Sl.No. 225 Schedule IV of Notification No. 01/2017 -C.T.(Rate) dated 28.06.2017 and Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 respectively upto 14.11.2017. From 15.11.2017, they are chargeable to 9% CGST and 9% SGST as per S.No. 449B of Schedule -III of Notification No. 01/2017 -C.T.(Rate) dated 28.06.2017 as amended and Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended respectively.

Issues Involved:
1. Classification of Vaya Tyffyn and Vaya Drynk under the Harmonized System of Nomenclature (HSN).
2. Applicable GST rate for Vaya Tyffyn and Vaya Drynk.

Detailed Analysis:

Classification of Vaya Tyffyn and Vaya Drynk under the Harmonized System of Nomenclature (HSN):

Applicant's Argument:
The Applicant contends that their products, Vaya Tyffyn and Vaya Drynk, are household articles commonly known as lunch boxes and bottles, respectively. They argue that these products should be classified under HSN 7323, which pertains to household articles of iron and steel, as these items are used in domestic settings by individuals. The Applicant emphasizes that their products are not vacuum flasks or vessels as per HSN 9617, despite having vacuum insulation technology, because they are used regularly and not designed to retain temperature for extended periods.

Authority's Examination:
The Authority examined the brochures, sample bills of entry, and invoices submitted by the Applicant. It was noted that Vaya Tyffyn and Vaya Drynk are made of stainless steel with vacuum insulation technology designed to keep food and beverages at a desired temperature for a reasonable period. The Authority referred to the relevant section notes, chapter notes, and explanatory notes of HSN 7323 and 9617.

HSN 7323:
This heading covers a wide range of iron or steel articles used for table, kitchen, or other household purposes, including utensils and other household items. The explanatory notes specify that this group includes articles not more specifically covered by other headings.

HSN 9617:
This heading includes vacuum flasks and other vacuum vessels designed to keep liquids, food, or other products at a fairly constant temperature for reasonable periods. The explanatory notes specify that this heading covers double-walled stainless steel vacuum insulated thermal flasks without a protective outer case.

Authority's Conclusion:
The Authority concluded that Vaya Tyffyn and Vaya Drynk, being double-walled stainless steel articles with vacuum insulation designed to retain temperature, are more specifically classified under HSN 9617. The products are categorized as vacuum vessels capable of retaining food/drink at a particular temperature, which aligns with the description under HSN 9617.

Applicable GST Rate for Vaya Tyffyn and Vaya Drynk:

Initial GST Rate:
As per Notification No. 01/2017 -C.T.(Rate) dated 28.06.2017, heading 9617 was covered under Schedule IV at Sl.No. 225, attracting a GST rate of 14% CGST and 14% SGST.

Amendment in GST Rate:
The notification was amended by Notification No. 41/2017-C.T.(Rate) dated 14.11.2017, which reclassified heading 9617 under Schedule II at Sl.No. 449B, reducing the GST rate to 9% CGST and 9% SGST. These amendments were effective from 15.11.2017.

Authority's Ruling:
1. The goods 'Vaya Tyffyn' and 'Vaya Drynk' are classifiable under CTH 96170019.
2. The applicable GST rate is 14% CGST and 14% SGST as per Sl.No. 225 Schedule IV of Notification No. 01/2017 -C.T.(Rate) dated 28.06.2017 and Notification No. II(2)/CTR/532(d-4)/2017 up to 14.11.2017. From 15.11.2017, the applicable GST rate is 9% CGST and 9% SGST as per Sl.No. 449B of Schedule II of the amended notifications.

Conclusion:
The Authority for Advance Ruling determined that Vaya Tyffyn and Vaya Drynk should be classified under HSN 96170019 due to their vacuum insulation properties. The applicable GST rate is 14% CGST and 14% SGST up to 14.11.2017, and 9% CGST and 9% SGST from 15.11.2017 onwards.

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