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2022 (9) TMI 888 - AAR - GSTClassification of goods - Bus air-conditioning system inclusive of Rooftop unit, compressor and installation kit for one consolidated price to a single customer - Rooftop unit, compressor and installation kit sold to single customer for a single fitting at customer end, but price negotiated and agreed separately for each unit - Rooftop unit, compressor and installation kit sold as Rooftop unit alone - Classification of Rooftop unit, compressor and installation kit sold as Rooftop unit and compressor - Rooftop unit, compressor and installation kit sold as Compressor - Rooftop unit, compressor and installation kit sold as Installation Kit - Rooftop unit, compressor and installation kit sold as Compressor and installation kit - Rooftop unit, compressor and installation kit sold as Rooftop unit and installation kit - Rooftop unit, compressor and installation kit sold as Rooftop unit and compressor. Classification of Bus air-conditioning system which comprises of Rooftop unit, compressor and installation kit for one consolidated price to a single customer - HELD THAT - It is observed from the Customs Tariff Act 1975 that Chapter 84 covers machinery and mechanical appliances and parts thereof and heading 8415 covers Air conditioning machines, comprising a motor driven fan and elements for changing the temperature and humidity, including those machines in which the humidity can't be separately regulated. Heading 8415 20 covers air conditioning machines of a kind used for persons in motor vehicles and the heading 8415 2010 covers the said machines for buses - In the instant case, it is an admitted fact that the applicant supplies the air conditioning system, comprising of Rooftop unit, Compressor and Installation kit, as a single product for a consolidated price to a single customer, exclusively for buses. Thus the said air conditioning system for buses merits classification under heading 8415 20 10 as the same is specifically classified under the said heading. Classification of Rooftop unit, compressor and installation kit sold to single customer for a single fitting at customer end, but price negotiated and agreed separately for each unit - HELD THAT - It could be inferred from the question that the applicant is undoubtedly supplying bus air condition system only comprising all the three major components as in the case of first question, but the prices of individual components have been negotiated and agreed separately for each of the units. Further it is an admitted fact and pertinent to mention here that these parts are meant for a single fitting at customer end. In other words the entire air condition system is fitted into a particular bus and for a particular customer except that the components are negotiated and agreed separately - In the instant case when Rooftop Unit, Compressor and Installation Kit are supplied together to a single customer for a single fitting at customer end, it amounts to supply of a composite machine designed for the purpose of performing the principal function of a bus air conditioning system, and hence such supply is classifiable under tariff heading 84152010 and attracts GST accordingly. Classification of Rooftop unit, compressor and installation kit when sold individually or combinations - HELD THAT - Rooftop unit and Installation kits are not classified individually under the Customs Tariff Act 1985, but are identified/recognised as parts of the composite machine i.e. air condition system for a bus itself. Thus the above items either individually or in combinations, are to be classified as parts of said composite machine, as they are suitable for solely or principally with a particular composite machine i.e. air conditioning system for bus. Thus they merit classification under heading 8415.90.00 i.e., parts of air conditioning machines and attracts GST accordingly. Classification of compressor when sold individually - HELD THAT - It could be seen from the table above that pas compressor of kind used in air-conditioning equipment are classified under tariff heading 84148011. Reference invited to Note 2 (a) of Section XVI, mentioned at para 14 supra, which specifies that parts which are goods included in any of the heading of Chapter 84 or 85 (Other than headings 8409,8431,8448,8466,8473,8487,8503,8522,8529,8538 and 8548 are in all cases to be classified in their respective headings . Thus the gas compressors used in air-conditioning equipment which are classified under tariff heading 84148011 merit classification in all cases in their respective heading only and accordingly the compressor in the instant case merits classification under tariff heading 84148011 and attract GST accordingly.
Issues Involved:
1. Classification of Bus air-conditioning system inclusive of Rooftop unit, compressor, and installation kit for one consolidated price to a single customer. 2. Classification of Rooftop unit, compressor, and installation kit sold to a single customer for a single fitting at customer end, but price negotiated and agreed separately for each unit. 3. Classification of Rooftop unit, compressor, and installation kit sold individually or in various combinations. Detailed Analysis: 1. Classification of Bus air-conditioning system inclusive of Rooftop unit, compressor, and installation kit for one consolidated price to a single customer: The applicant supplies a complete bus air-conditioning system, which includes a Rooftop unit, compressor, and installation kit, as a single product for a consolidated price to a single customer. According to the Customs Tariff Act 1975, Chapter 84 covers machinery and mechanical appliances, and heading 8415 specifically covers air conditioning machines used for persons in motor vehicles. Heading 8415 20 covers air conditioning machines of a kind used for persons in motor vehicles, and heading 8415 2010 covers such machines for buses. Therefore, the bus air-conditioning system comprising the Rooftop unit, compressor, and installation kit, supplied as a single product for a consolidated price, merits classification under heading 8415 20 10. 2. Classification of Rooftop unit, compressor, and installation kit sold to a single customer for a single fitting at customer end, but price negotiated and agreed separately for each unit: In this scenario, the applicant supplies the bus air-conditioning system comprising all three major components (Rooftop unit, compressor, and installation kit) for a single fitting at the customer end, but the prices of individual components are negotiated and agreed upon separately. According to Notes 2 to 5 of Section XVI of the Customs Tariff Act 1975, composite machines consisting of individual components intended to contribute together to a clearly defined function are to be classified in the heading appropriate to that function. Thus, when the Rooftop unit, compressor, and installation kit are supplied together to a single customer for a single fitting, it amounts to the supply of a composite machine designed for the purpose of performing the principal function of a bus air-conditioning system. Therefore, such supply is classifiable under tariff heading 8415 20 10. 3. Classification of Rooftop unit, compressor, and installation kit sold individually or in various combinations: When the Rooftop unit, compressor, and installation kit are sold individually or in combinations, they are classified as parts of the composite machine (bus air-conditioning system). According to the Customs Tariff Act 1985, Rooftop units and installation kits are not individually classified but are recognized as parts of the composite machine. Therefore, these items, whether sold individually or in combinations, merit classification under heading 8415.90.00, which covers parts of air conditioning machines. Classification of Compressor Sold Alone: The air or gas compressor used in air-conditioning equipment is classified under tariff heading 8414, specifically 8414 80 11 for gas compressors of a kind used in air-conditioning equipment. According to Note 2(a) of Section XVI, parts that are goods included in any of the headings of Chapter 84 or 85 are to be classified in their respective headings. Therefore, the compressor sold alone merits classification under tariff heading 8414 80 11. RULING: a. The Bus air-conditioning system inclusive of Rooftop unit, compressor, and installation kit for one consolidated price to a single customer merits classification under heading 8415 20 10. b. The Rooftop unit, compressor, and installation kit sold to a single customer for a single fitting at the customer end, but price negotiated and agreed separately for each unit, also merit classification under heading 8415 20 10. c. The Rooftop unit or installation kit sold individually or in combinations thereof merit classification under heading 8415.90.00. These combinations include: - Rooftop unit alone - Rooftop unit and compressor - Installation Kit - Compressor and installation kit - Rooftop unit and installation kit - Rooftop unit and compressor The compressor sold alone merits classification under tariff heading 8414 80 11.
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