2020 (7) TMI 139 - AAR - GST

Classfication of supply - supply of patent-applied LED stem (long bulb) with fittings when both are manufactured in the applicant's factory and supplied as a single unit - GST Tariff Code - rate of GST - Composite supply or Mixed Supply - HELD THAT - Chapter 94 falls under Section XX which covers 'Miscellaneous Manufactured Articles'. Lamps and light fittings can be of any source and made of any material. Further, those lamps and light fittings covered under Chapter 85 are not covered under this heading by the specific exclusion in the Chapter Notes. Further, lamps for exterior lighting are covered under CTH 9405. In the instant case, the product is a LED lamp fixture with LED light integrated into it which can function independently as garden lights. Therefore, they are classifiable under CTH 94054090 as 'others electric lamps and light fitting'. It is seen that LED lights or fixtures including LED lamps classified under CTH 9405 are taxable to 6% CGST vide SI.No. 226 of Schedule II of Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 as amended and 6% SGST as per S.No. 226 of Schedule-II of G.O. (M.S.) No. 62 dated 29.06.2017 as amended.

Summary

Issues Involved:
1. Classification of the product under the appropriate GST Tariff code.
2. Determination of the applicable GST rate.
3. Clarification on whether the supply is a composite supply or a mixed supply.

Issue-Wise Detailed Analysis:

1. Classification of the Product:
The applicant, engaged in the manufacturing and trading of LED lights with fittings, sought to classify their product "LED stem (long bulb)" under the appropriate GST Tariff code. The product comprises various electronic components, a high-graded UV protected polycarbonate body, and a base, intended to be fitted into a lighting fixture for area lighting. The applicant claimed that their product should be classified under Chapter 94 of the Customs Tariff Act, 1975, specifically under Tariff Heading 9405, which pertains to "Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included." They argued that their product, being a complete lighting fixture, should not be classified under Chapter 85, which covers electrical machinery and equipment, including LED lamps as components. The Authority for Advance Ruling (AAR) examined the relevant chapter headings and section notes, concluding that the product is classifiable under CTH 94054090 as "other electric lamps and light fittings."

2. Determination of the Applicable GST Rate:
The applicant contended that the applicable GST rate for their product should be 12% (6% CGST and 6% SGST) as per Entry No. 226 of Schedule II of Notification No. 01/2017-C.T. (Rate) dated 28.06.2017, which covers "LED lights or fixtures including LED lamps." The AAR confirmed this view, stating that the product, classified under CTH 94054090, is taxable at the rate of 6% CGST and 6% SGST.

3. Clarification on Composite Supply or Mixed Supply:
The applicant sought clarification on whether the supply of the LED stem (long bulb) with fittings constitutes a composite supply or a mixed supply. The AAR noted that the product is supplied as a single unit, with the LED lamp integrated into the fixtures, ready for use upon connection to a power source. The Authority concluded that the supply is a single supply, not a composite or mixed supply, as the product is an integrated LED lighting fixture.

Ruling:
The AAR ruled that the supply of "LED stem (long bulb)" by the applicant is classifiable under CTH 94054090 and is taxable at the rate of 6% CGST and 6% SGST, as per Entry No. 226 of Schedule II of Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 and corresponding state notification.