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2019 (7) TMI 1334 - AAR - GSTClassification of goods - rate of tax - Door-handle of motor vehicle - Fittings made of plastic for motor vehicle s doors such as bracket, housing, bracket housing, stator, gasket - Glove box locking - HELD THAT - The expression parts and parts and accessories (whether or not they are identifiable as for the goods of this Section), do not apply to parts of general use, as defined in Note 2 to Section XV of base metal (Section XV) or similar goods of plastic Chapter 39). In other words, the parts of general use will not be classified as parts of the goods of the section XVII that covers the chapters 86 (Railways), 87 (Automobiles), 88 (Aircrafts, Spacecrafts) and 89 (Ships and Boats), even if they are identifiable with the goods of these headings - Once an item is a part of general use, it will be classified according to its constituent material as per Explanatory Note 2 (b) to Section XVII. Door handle - HELD THAT - Explanatory Note to 8302 lists door handle for automobiles as includible under heading 8302 even if they are designed for use in automobiles. Door handle thus will be categorized as part of general use as per Note 2 to Section XV and hence will be classified according to the constituent material. In the instant case as the door handle is made of plastic will merit classification under the heading 3926. Brackets - Housing and Bracket Housing - HELD THAT - Brackets suitable for automobiles find mention in the explanatory note (C) under heading 8302, Similarly, Housing and Bracket Housing are covered under sub-heading 8302 30 under the description mountings and fittings . Thus Brackets, Housing and Bracket Housing will be categorized as part of general use as per Note 2 to Section XV and hence will be classified according to their constituent material, In the instant case as the Brackets, Housing and Bracket Housing are made of plastic, they will merit classification under the heading 3926. Washers - HELD THAT - Washers are mentioned in the heading text of 7318, The item gasket is similar to washer both being placed between two objects where the former is placed between two objects to prevent friction and the latter to prevent leakage. Therefore washers and gaskets will be categorized as part of general use as per Note 2 to Section XV and hence will be classified according to the constituent material. In the instant case as the washers and gaskets are made of plastic, they will merit classification under the heading 3926. Stator - HELD THAT - The item Stator is a part of an automobile lock. As the Automobile locks are specifically mentioned in the heading 8301.20, the stator being its part merits classification under 8301.60 (parts). Therefore stators will be categorized as part of general use as per Note 2 to Section XV and hence will be classified according to the constituent material. In the instant case as the stators are made of plastic, they will merit classification under the heading 3926. Glove box locking - HELD THAT - Glove box locking is also a lock of an automobile of heading 8301. Therefore will be categorized as part of general use as per Note 2 to Section XV and hence will be classified according to the constituent material. In the instant case as the Glove box locking are made of plastic, they will merit classification under the heading 3926.
Issues Involved:
1. Classification of goods under GST. 2. Applicable rate of Goods and Services Tax (GST) for specific products. Issue-wise Detailed Analysis: 1. Classification of Goods under GST: The applicant, M/s. Nexture Technologies Private Limited, sought an advance ruling on the classification of the following products: - Door-handle of motor vehicles. - Plastic fittings for motor vehicle doors (bracket, housing, bracket housing, stator, gasket). - Glove box locking. The applicant contended that these goods should be classified under Entry at S. No. 111 of Schedule III of Notification No. 1/2017-Central Tax (Rate), which pertains to "plastics and articles of other materials of headings 3901 to 3914," and are thus exigible to central tax at the rate of 9% (total GST rate of 18%). The applicant argued that the impugned goods fall under Chapter 39 of the Customs Tariff Act, specifically under Heading 3926 which covers "Other articles of plastics and articles of other materials of headings 3901 to 3914." They further asserted that these goods are parts of general use and hence should not be classified under Heading 8708, which covers "Parts and accessories of motor vehicles of headings 8701 to 8705." The jurisdictional officer, however, contended that the goods should be classified under Heading 8708, which would subject them to a higher GST rate of 28%. 2. Applicable Rate of Goods and Services Tax (GST): The applicant's interpretation was that the goods should be taxed under the lower rate applicable to Heading 3926, while the jurisdictional officer argued for the higher rate applicable to Heading 8708. Observations and Findings: The Authority for Advance Ruling (AAR) examined the relevant chapters and notes of the Customs Tariff Act and the Harmonized System of Nomenclature (HSN). The key points considered were: - Parts of General Use: As per Note 2 to Section XV of the HSN, parts of general use include items such as door handles, fittings, and mountings for vehicle coachwork. These items, even if specifically designed for use in automobiles, are classified according to their constituent material if they fall under the definition of parts of general use. - Constituent Material: The goods in question are made of plastic and are manufactured using PVC granules. The classification should therefore be based on the material composition, which in this case is plastic. - Relevant Headings: The AAR referred to Heading 3926 for plastics and articles thereof, and Heading 8708 for parts and accessories of motor vehicles. The AAR concluded that the goods in question (door handles, brackets, housings, gaskets, stators, and glove box locking) are parts of general use made of plastic and should be classified under Heading 3926. Conclusion: The AAR ruled that the products in question are classifiable under Heading 3926 of the GST Tariff as articles of plastic. Consequently, they are subject to the GST rate applicable to that heading, which is 18% (9% central tax and 9% state tax). Order: The AAR concluded that the goods mentioned (door handles, plastic fittings for motor vehicle doors, and glove box locking) are classifiable under Chapter 3926 and will be taxable at the GST rate applicable to that heading. Citation: 2019 (7) TMI 1334 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA Date: Mumbai, dt. 01-06-2019 Note: This summary maintains the privacy of the parties involved and focuses on the legal terminology and significant phrases from the original judgment.
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