Walltop computer to be classified as ‘automatic data processing machine’ under Customs Tariff heading 8471 41 90

[CA Bimal Jain]

The AAR, Karnataka in the matter of IN RE: M/S. VIRTULIVE TECHNOLOGIES PVT. LTD. - 2022 (12) TMI 951 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKA has held that, a walltop computer is neither a micro-computer nor a large computer and to be classified as an automatic data processing unit covered under Customs Tariff heading 8471 41 90.

Facts:

M/s Virtulive Technologies Pvt. Ltd. (“the Applicant”) is engaged in the manufacturing of a Walltop Computer named ‘Roombr’ (“the Impugned Product”), which aims to extend computing power to an interactive wall to make office meetings and classroom teaching easier.

The Applicant has contended that the Impugned Product is an Automatic Data Processing machine and has a central processing unit i.e. a processor-based motherboard with RAM and storage, an input unit i.e. an IR pen and a Bluetooth keyboard and an output unit i.e. a projected interactive display and hence, the Impugned Product is classifiable under tariff heading 8471 41 90 of Chapter 84 of the Customs Tariff Act, 1975 (“the Customs Tariff Act”).

The Applicant has sought an advanced ruling regarding classification of the Impugned Product.

Issue:

Whether the Impugned Product is covered under tariff heading 8471 of the Customs Tariff Act?

Held:

The AAR, Karnataka in IN RE: M/S. VIRTULIVE TECHNOLOGIES PVT. LTD. - 2022 (12) TMI 951 - AUTHORITY FOR ADVANCE RULINGS, KARNATAKAhas held as under:

• Noted that, the Impugned Product can perform all of the tasks listed in Note (6)(A) to Chapter 84 of the Customs Tariff Act. As a result, it perfectly fits into the category of automatic data processing machines.
• Observed that, the Impugned Product has a central processing unit, an input unit and output unit as mentioned in the explanatory notes pertaining to tariff heading 8471 of the Customs Tariff Act. Further, the Impugned Product is covered under the category of automatic data processing machines.
• Stated that, the sub-classification of the Impugned Product will be classified as ‘others’ under tariff heading 8471 41 90 as the Impugned Product is neither a micro-computer nor a large computer.
• Held that, the Impugned Product is classifiable under tariff heading 8471 41 90.

Relevant Provisions:

Note (6)(A) to Chapter 84 of the Customs Tariff  Act (w.e.f. January 1, 2022):

“For the purposes of heading 8471, the expression "automatic data processing machines" means machine capable of :

(i) storing the processing programme or programmes and at least the data immediately necessary for the execution of the programme

(ii) being freely programmed in accordance with the requirements of the user;

(iii) performing arithmetical computations specified by the user; and

(iv) executing, without human intervention, a processing programme which requires them to modify their execution, by logical decision during the processing run;”

Tariff heading 8471 41 90 of the Customs Tariff Act:

“Tariff Item	Description	Unit	Rate of Duty	Preferential Area Rate
8471	AUTOMATIC DATA PROCESSING MACHINES AND UNITS THEREOF; MAGNETIC OR OPTICAL READERS, MACHINES FOR TRANSCRIBING DATA ON TO DATA MEDIA IN CODED FORM AND MACHINES FOR PROCESSING SUCH DATA , NOT ELSEWHERE SPECIFIED OR INCLUDED
847141	Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined :
84714110	Micro computer	u	Free
84714120	Large or main frame computer	u	Free
84714190	Other	u	Free”

(Author can be reached at [email protected])