2021 (12) TMI 372 - AAR - GST

Classification of supply - Coach Work like Switch Board Cabinet for Railway Coaches and Locomotives - HELD THAT - The applicant is registered under the GST Act and intend to supply Switch Board Cabinet for Railway Coaches and Locomotive consisting of all the power/control switchgear for coach lighting, air conditioning, pantry, pump control, sanitary system and public address system of Railways for which capability and capacity assessment of the applicant has been done by the RDSO. However, the applicant has not produced any Purchase Order issued by the Railways for supply of Switch Board Cabinet along with application of advance ruling. Switch Board Cabinet are classified under HSN 8537. The chapter subheading 8537 cover Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, incl. those incorporating instruments or apparatus of chapter 90, and numerical control apparatus (excluding switching apparatus for line telephony or line telegraphy). We find that as per RDSO Specification No. RDSO/PE/SPEC/AC/0814-2015(Rev.0), Switch Board cabinet is equipped with power switchgear, control switchgear, fuses, MPCB, MCB, Relay etc i.e. two or more apparatus of heading 8535 or 8536. As such, the product Switch Board cabinet merits classification under HSN 8537. Switch Board Cabinet, though to be used in Railway coaches, cannot be called as parts of railway bogies under Chapter Headings 8607 of the Tariff, due to the specific HSN available for Switch Board Cabinet and therefore, the Switch Board Cabinet merit classification under HSN 8537. As per Section 9(1) of the CGST Act, 2017, the levy of tax on the supply of goods or services is at such rates as may be notified by the Government on the recommendations of the Council. Accordingly, Notification No. 1/2017-Central Tax (Rate) dated 28-Jun-2017 has been issued to notify the rates. The opening paragraph of the referred notification provides that the stipulated rate in the given Schedules shall apply on the supply of goods which should not only fall in the given tariff item, sub-heading, heading or Chapter but also meet the specified description - The Switch Board Cabinet is covered in the Entry no. 388B of Schedule III of Notification No. 1/2017 C.T. (Rate) dt. 28.06.2017 and attract GST @18%.

Summary

Issues: Classification of Coach Work like Switch Board Cabinet for Railway Coaches and Locomotives.

Issue Analysis:
1. The applicant sought an advance ruling on the classification of "Switch Board Cabinet" for Railway Coaches and Locomotives.
2. The applicant intended to supply the product strictly as per Railways' specifications and design.
3. The applicant claimed that the product should be classified under Heading 8607 of the C.Ex. Tariff/GST Tariff.
4. The Assistant Commissioner opined that Chapter subheading 8607 is the correct classification for "Switch Board Cabinets" for Railway Coaches/Locomotives and Rolling stock of Railways.
5. The applicant was granted a personal hearing during which they reiterated their submissions.
6. The Authority noted that the issue raised falls under Section 97(2) of the CGST Act 2017, admitting the application for consideration.
7. The applicant did not provide a Purchase Order issued by Railways for the supply of Switch Board Cabinet.
8. The Authority examined the Customs Tariff Act and found that Switch Board Cabinets are classified under HSN 8537, not 8607 as claimed by the applicant.
9. The Authority referenced Circular No. 30/4/2018-GST, clarifying that goods classified under Chapter 86 and supplied to Railways attract a specific GST rate.
10. The ruling concluded that the Switch Board Cabinet should be classified under HSN 8537, attracting GST at 18% (CGST 9% & SGST 9%).
11. The ruling is valid within the jurisdiction of the Authority for Advance Ruling Uttar Pradesh.

This detailed analysis of the legal judgment provides a comprehensive understanding of the issues involved and the Authority's findings regarding the classification of the Switch Board Cabinet for Railway Coaches and Locomotives under the GST Tariff.