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2018 (10) TMI 1053 - AAR - GSTRate of tax - Electrical Wiring Harness - Whether the Electrical Wiring Harness, primarily an electrical wire with connectors at both ends, manufactured by the Applicant falls under HSN tariff item 8544 for which the rate prescribed vide Notification No. 01/2017 - Central Tax (Rate) dated 28th June 2017 read with 41/2017 - Central Tax (Rate) dated 14th November 2017 is 9%? - whether the said rate of Central tax of 9% is applicable to the above product with effect from 1st July 2017? Held that - The Applicant is engaged in the manufacture of Electrical Wiring Harness Assembles consisting of insulated wires and cables with connectors used in brake systems and related parts for heavy vehicles such as bus, trucks and other such commercial vehicles; They have been supplying the Electrical Wiring Harness to their customers such as major automobile manufacturers and in the retail segment through their distributors - The applicant manufactures Electrical Wiring Harness which are insulated wires and cables with connectors which is used in automobile Industry and therefore it is to be seen that they are to be classified under HSN 85443000. Rate of tax - Held that - The product in question is an Electrical Wiring Harness set falling under 85443000. Winding Wires, Coaxial cables and optical Fiber falls under Chapter Heading 854410, 854420 and 854470 respectively. Therefore, the product in question is covered under Sl.No. 161 of Schedule IV above of Notification No. 1/2017-C.T.(Rate) dated 28.06.2017 and G.O. (Ms) No. 62 dated 29.06.2017 No. Il(2)/CTR/532(d-4)/2017 and is subject to tax at the rate of 14% CGST and 14% SGST. The said Notification is amended as per Notification No. 41/2017- C.T.(Rate) dated 14th November 2017 and G.O. (Ms) No. 157, dated 14.11.2017 by which the Entry at SI.No. 161 of Schedule IV was omitted and the entry at SLNo. 395 of Schedule III was modified as Insulated (including enameled or anodized) wire, cable (including co-axial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors . Thus, the Electrical Wiring Harness manufactured by the Applicant, was subjected to tax @ 14% CGST and 14% SGST for the period from 01.07.2017 to 14.11.2017 and thereon, the tax rate is reduced to 9% CGST and 9% SGST. Ruling - The Electrical Wiring Harness manufactured by the Applicant falls under the HSN tariff item No. 85443000 for which the rate prescribed is 14% CGST for the period from 01.07.2017 to 14.11.2017 and from 15.11.2()17, the rate of tax is 9% CGST under Sl.No. 395 of Schedule III of Notification No. 01/2017-C.T. (Rate) dated 28th June 2017 and 9% SGST under Sl.No. 395 of Schedule 111 of G.O. (Ms) No. 62 dated 29.06.2017 No. II(2)/CTR/532(d-4)/2017 - The rate of CGST and SGST at 9% each is applicable to the above product only with effect from 15.11.2017.
Issues:
1. Classification of Electrical Wiring Harness under HSN tariff item 8544. 2. Applicability of the tax rate to the Electrical Wiring Harness. Analysis: Issue 1: Classification of Electrical Wiring Harness under HSN tariff item 8544 The applicant, a limited company engaged in manufacturing brake systems and related parts for heavy vehicles, sought an advance ruling on whether the Electrical Wiring Harness falls under HSN tariff item 8544. The product consists of connectors, wires, cables, flame retardant tapes, and corrugated tubes used in Anti-lock Braking Systems for heavy vehicles. The applicant argued that the product should be classified under 85443000, "Ignition wiring sets and other wiring sets of a kind used in vehicles," rather than under parts and accessories of motor vehicles. The Authority examined the product and relevant tariff headings, concluding that the Electrical Wiring Harness indeed falls under HSN tariff item 85443000, as per the Customs Tariff Act and HSN Explanatory Notes. Issue 2: Applicability of the tax rate to the Electrical Wiring Harness The Authority further deliberated on the applicable tax rate for the Electrical Wiring Harness. Initially, the product was taxed at 14% CGST and 14% SGST from 01.07.2017 to 14.11.2017 under Sl.No. 161 of Schedule IV of Notification No. 01/2017-C.T. (Rate). However, post-amendment effective from 15.11.2017, the tax rate was reduced to 9% CGST and 9% SGST under Sl.No. 395 of Schedule III. Therefore, the ruling determined that the Electrical Wiring Harness is subject to a tax rate of 14% CGST and 14% SGST for the period up to 14.11.2017, and 9% CGST and 9% SGST from 15.11.2017 onwards. In conclusion, the Authority ruled that the Electrical Wiring Harness manufactured by the Applicant is classified under HSN tariff item 85443000 and is subject to varying tax rates based on the effective dates specified in the notifications, with 9% CGST and 9% SGST applicable from 15.11.2017.
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