2022 (2) TMI 826 - AAR - GST

Classification of goods - Coach Work like DRIVER CAB AIR CONDITIONER UNIT for EMU/MEMU trains of Railway Rolling Stock - to be classified under HSN 8607 or not - HELD THAT - In the instant case, it is observed that the DRIVER CAB AIR CONDITIONER UNIT for EMU/MEMU trains of Railway Rolling Stock would be manufactured by the applicant, strictly as per the specification and design provided by the Indian Railways (RDSO) and meant to be solely used in railway rolling stock and nowhere else. Accordingly, we observe that the ratio of the above referred judgments is squarely applicable in the instant case and the DRIVER CAB AIR CONDITIONER UNIT for EMU/MEMU trains of Railway Rolling Stock are classifiable under Tariff heading 86079920 i.e. Parts of tramway, locomotives and running stock . It is found that in Form GST ARA-01, the applicant has sought ruling on the question classification of Coachwork like DRIVER CAB AIR CONDITIONER UNIT for EMU/MEMU trains of Railway Rolling Stock only but in their letter dated 12.08.2021, the applicant has also sought ruling on the questions that if the above product is supplied to the Indian Railways or through other vendors/suppliers, what would be provision and classification of the products and rate of GST on said products supplied to Railway through its vendors. The question mentioned in statutory 'Form GST ARA-01' is to be answered only and other questions raised in forwarding letter are not worth consideration by the Authority of Advance Ruling.

Issues Involved:
1. Classification of DRIVER CAB AIR CONDITIONER UNIT for EMU/MEMU trains of Railway Rolling Stock.
2. Provision and classification of the product if supplied to Indian Railways through other vendors/suppliers.
3. Correct rate of GST on the said products supplied exclusively to Indian Railways through its vendors for its Coaches.

Issue-Wise Detailed Analysis:

1. Classification of DRIVER CAB AIR CONDITIONER UNIT for EMU/MEMU trains of Railway Rolling Stock:

The applicant, a registered assessee under GST, is engaged in manufacturing and supplying Railway Locomotive parts and Coach Parts as per Railways Drawings approved by RDSO. The applicant sought an advance ruling on the classification of the DRIVER CAB AIR CONDITIONER UNIT for EMU/MEMU trains.

The applicant argued that this product should be classified under chapter heading 8607 as parts of Coach Work. They cited Chapter Note 2 of Chapter 86, which includes coachwork under heading 8607, and provided various analogies and case laws to support their claim. The Assistant Commissioner, CGST & Central Excise Division-Lucknow II, also opined that Chapter subheading 8607 is the correct classification for the DRIVER CAB AIR CONDITIONER UNIT for EMU/MEMU trains.

The Authority for Advance Rulings (AAR) examined the submissions and noted that Chapter 86 of the Customs Tariff covers Railway or tramway locomotives, rolling-stock, and parts thereof, including coachwork. They referred to several case laws where similar items were classified under heading 8607. The AAR concluded that the DRIVER CAB AIR CONDITIONER UNIT for EMU/MEMU trains, manufactured as per the specifications and design provided by Indian Railways and meant solely for railway rolling stock, falls under Tariff heading 86079920, i.e., "Parts of tramway, locomotives and running stock."

2. Provision and classification of the product if supplied to Indian Railways through other vendors/suppliers:

The applicant also sought a ruling on the provision and classification of the DRIVER CAB AIR CONDITIONER UNIT if supplied to Indian Railways through other vendors/suppliers. However, the AAR noted that this question was not included in the statutory Form GST ARA-01 and, therefore, was not considered by the Authority for Advance Ruling. The ruling was confined to the question mentioned in Form GST ARA-01.

3. Correct rate of GST on the said products supplied exclusively to Indian Railways through its vendors for its Coaches:

Similarly, the applicant sought a ruling on the correct rate of GST on the DRIVER CAB AIR CONDITIONER UNIT supplied exclusively to Indian Railways through its vendors. As with the previous issue, this question was not included in the statutory Form GST ARA-01 and was not considered by the AAR. The ruling was limited to the classification of the product as mentioned in the application.

Ruling:

The AAR ruled that the classification of the DRIVER CAB AIR CONDITIONER UNIT for EMU/MEMU trains, manufactured as per the specific design and layout provided by the Railways and supplied to the Indian Railways only and nowhere else, falls under Chapter 86.07 of the GST Tariff.

This ruling is valid only within the jurisdiction of the Authority for Advance Ruling Uttar Pradesh and is subject to the provisions under Section 103 (2) of the CGST Act, 2017, until and unless declared void under Section 104(1) of the Act.

← Previous Next →