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2019 (7) TMI 811 - AAR - GSTClassification of goods - Automatic Electric Filter Coffee Maker - Manual/ Traditional Filter Coffee Maker - whether the Automatic Electric Filter Coffee Maker is a machinery not meant for domestic use and will therefore be classified under CTH 8419 and charged to GST at the rate of 18% effective from 14.11.2017 as per Notification No. 41/ 17 CTR dated 14.11.2017 with corresponding SI.No.220 of G.O. Ms. No. 157 dated 14.11.2017, issued under provisions of TNGST Act? - Whether the Manual/ Traditional Filter Coffee Maker, being not meant for domestic use and falling under CTH 8419 and charged to GST at the rate of 18% effective from 14.11.2017 as per Notification No. 41/17 CTR dated 14.11.2017 with corresponding Sl.No.220 of G.O. Ms. No. 157 dated 14.11.2017, issued under provisions of TNGST Act? HELD THAT - Chapter 85 covers all machines and machinery other than those classified under chapter 84 which remain classified there even if they are electric. Chapter 8516 covers Other electro-thermic appliances of a kind used for domestic purposes under which coffee makers are classified under 85167100. This means that coffee makers used for domestic purposes are classified under chapter 8516. This is also stated in the explanatory notes that only electro-thermic machines, including coffee makers, normally used in the household are covered under this heading. The notes also specifically excludes thermo-electric appliances which are not normally used in the household which are to be classified under heading 8419 - Therefore, Gemini Modern Auto Coffee Filter and Gemini Modern Traditional Coffee Filter are specifically excluded from heading 8516 and should be classified under chapter 8419 and specifically under 84198190. Whether Sl.No. 320 of Schedule III to Notification no. 41/17 C.T.(Rate) dated 14.11.2017 is applicable and the products are liable to tax at the rate of 18% GST? - HELD THAT - Prior to the amendment vide Notification no. 41/17 C.T.(Rate) dated 14.11.2017, CTH 8419 is mention only in Sl.no. 320 of Schedule III and Sl. No 121 of Schedule IV. However, only specific machinery were covered under these Sl.Nos which do not include Coffee makers for non domestic use. Therefore, for the period 01.07.2017 to 14.11.2017, the applicable rate on Gemini Modern Auto Coffee Filter and Gemini Modern Traditional Coffee Filter is CGST 9% as per Sl.No. 453 of Schedule-III of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017 and SGST 9% as per Sl.No. 453 of Schedule -III of Notification vide G.O. (Ms) No. 62 dated 29.06.2017. Machinery, for the treatment of materials by process involving a change of temperature such as cooking, other than machinery of a. kind used for domestic purpose , falling under the tariff item 8419 is covered under the said entry. In the case at hand as discussed in para 7.4 above, the products are machines covered under 8419, not of a kind used for domestic purposes, therefore are squarely covered under the said entry. Hence, the products under consideration are taxable to CGST 9% and SGST 9% as per Sl. No. 320 of Schedule IIII to Notification no. 01/2017-C.T.(Rate) dated 28.06.2017 as amended by Notification No. 41/2017 dated 14.11.2017 and SI.No. 320 of Schedule III to Notification No.II(2)/CTR/532(d-4)/2017 vide G.O, (Ms) No. 62 dated 29.06.2017 effective from 15.11.2017.
Issues Involved:
1. Classification of Automatic Electric Filter Coffee Maker under GST. 2. Classification of Manual/Traditional Filter Coffee Maker under GST. 3. Applicable GST rate for both types of coffee makers. Issue-wise Detailed Analysis: 1. Classification of Automatic Electric Filter Coffee Maker under GST: The Applicant manufactures an Automatic Electric Filter Coffee Maker designed for commercial use, not domestic. The machine contains a water tank, an immersion heater, a solenoid valve, and a thermostat controlled by a Printed Circuit Board (PCB). It can handle large quantities of coffee powder, making it suitable for hotels and restaurants. The Applicant contends that this product falls under Chapter Heading 8419 of the GST tariff, which covers machinery for the treatment of materials by a process involving a change of temperature, and should be taxed at 18% as per Notification No. 41/17 CTR dated 14.11.2017. 2. Classification of Manual/Traditional Filter Coffee Maker under GST: The Manual/Traditional Filter Coffee Maker is also intended for commercial use and can handle significant quantities of coffee powder. This machine requires hot water to be poured manually and uses electricity to maintain the temperature through a thermostat. The Applicant argues that this product also falls under Chapter Heading 8419, similar to the Automatic Electric Filter Coffee Maker, and should be taxed at 18%. 3. Applicable GST rate for both types of coffee makers: The jurisdictional authority and the Assistant Commissioner (ST) provided their comments, emphasizing that these products are classifiable under Chapter Heading 85167100, which covers "Coffee or tea makers" and attracts a GST rate of 28%. However, the Applicant argues that the machines are not for domestic use and should be classified under Chapter Heading 8419, attracting a lower GST rate of 18%. Judgment: The Authority examined the relevant chapter headings, explanatory notes, and the specific functions of the products. It was noted that Chapter 8419 covers machinery designed to cause a transformation of materials resulting from a temperature change, which includes the coffee makers in question. The products are not meant for domestic use but for commercial purposes, and therefore, they fall under Chapter Heading 84198190. For the period from 01.07.2017 to 14.11.2017, the applicable rate on the coffee makers was CGST 9% and SGST 9% as per Sl.No. 453 of Schedule-III of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017. From 15.11.2017 onwards, the products are taxable to CGST 9% and SGST 9% as per Sl. No. 320 of Schedule III to Notification No. 01/2017-C.T.(Rate) dated 28.06.2017, as amended by Notification No. 41/2017 dated 14.11.2017. Ruling: 1. "Gemini Modern Auto Coffee Filter" and "Gemini Modern Traditional Coffee Filter" are classifiable under Chapter Heading 84198190. 2. For the period 01.07.2017 to 14.11.2017, the applicable rate on these products is CGST 9% and SGST 9% as per Sl.No. 453 of Schedule-III of Notification No. 01/2017-C.T.(Rate) dated 28.06.2017. From 15.11.2017, the products are taxable to CGST 9% and SGST 9% as per Sl. No. 320 of Schedule III to Notification No. 01/2017-C.T.(Rate) dated 28.06.2017, as amended by Notification No. 41/2017 dated 14.11.2017.
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