2024 (10) TMI 193 - AAR - GST

Classification of goods - Baby Carriers with Hip seat - to be covered by HSN code 63079099 or not - HELD THAT - From a bare reading of the Chapter Heading 6307, it can be derived that other made up articles, including dress pattern is wide enough to cover the articles like Baby carriage with hip seat. In COMMISSIONER OF CUSTOMS, ACC, MUMBAI VERSUS RUBY IMPEX LTD. 1999 (12) TMI 271 - CEGAT, MUMBAI , the appellant imported car covers, made of polyester which were used to cover a car when it was parked for long periods; e.g., overnight to protect its surface from the elements. The importer was of the view that goods so imported would be classified under Heading 8708.99 being parts and accessories of motor vehicle. The department did not accept this classification and took a view that the goods were more appropriately classifiable as made up articles of textiles under Heading 6307.90. The Hon ble Tribunal held that car covers are not part of motor vehicles and are classifiable as made up articles of textiles under sub-heading 6307.90 of Customs Tariff Act, 1975. Similar view may be taken for the instant case and the item baby carrier with seats, made of textile fabric, may be classified under sub-heading 6307.90. Supply of Baby Carrier with hip seat as manufactured by the applicant shall be covered under HSN 6307 90 and would attract tax @ 5% when sale value does not exceed Rs. 1,000/- per piece and @12% when sale value exceeds Rs. 1,000/- per piece.

Summary

Issues: Classification of "Baby Carriers with Hip Seat" under the GST Act.

Analysis:
1. Background and Application: The applicant, a company engaged in manufacturing and trading of "Baby Carriers with Hip Seat," sought an advance ruling under Section 97 of the GST Act regarding the correct classification of their product under the HSN code.

2. Applicant's Submission: The applicant described the manufacturing process of the baby carriers, highlighting the materials used and the steps involved. They initially classified their product under HSN Code 8715 but later reconsidered due to feedback from e-commerce operators. The applicant observed that their product did not fit under HSN 8715 but aligned more closely with HSN code 6307, which attracted a lower tax rate.

3. Revenue's Submission: The revenue authority did not provide any specific view on the matter.

4. Observations and Findings: The Authority reviewed the applicant's submissions and the relevant tariff items. They noted that the product "Baby Carriage with Hip Seat" could be classified under Chapter 63, specifically under Sub-Heading 63079099, as it fell under the description of "Other made up textile articles" within Chapter 63.

5. Legal Precedent: The Authority referred to a previous case where car covers made of textile fabric were classified under sub-heading 6307.90 instead of as parts and accessories of motor vehicles. Drawing a parallel, the Authority opined that the baby carriers with seats made of textile fabric should also be classified under sub-heading 6307.90.

6. Ruling: The Authority ruled that the supply of "Baby Carrier with Hip Seat" would be classified under HSN 6307 90 and attract a tax rate of 5% when the sale value does not exceed Rs. 1,000 per piece and 12% when the sale value exceeds Rs. 1,000 per piece.

This judgment clarifies the correct classification of the applicant's product under the GST Act, providing guidance on the applicable tax rates based on the sale value per piece. The ruling offers a detailed analysis of the product's characteristics, material composition, and aligns it with the relevant tariff items under Chapter 63 for taxation purposes.