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TMI Blog2023 (1) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... /s Savex Technologies Private Limited (herein after referred to as "Applicant") is registered under GST vide GSTIN 22AAACS5547H2ZH and is engaged in the trading of electronic items such as projectors, LCD monitors, LCD screens and its after sales service & is also the distributor of Information Communication and Technology Products and allied services. Applicant has approached this authority under Section 97(2)(a) & (b) of the CGST Act, 2017 on the following questions: - a. Whether their product interactive Flat Panels (IFPs) being traded by the Applicant qualifies under Chapter heading 8471 41 90? b. Rate of fax applicable on such goods is 9% CGST & 9 % SGST in terms of Entry No. 360 to Schedule - III to Notification No. 01/2017 - Central Tax (Rate) dated 28.06.2017. 2.2 Applicant has purchased goods i.e., "BenQ Interactive Flat Panel RP7502 Black 75", from supplier namely i.e., M/s Benq India Private Limited vide Invoice Number TN-23-INV-10570 dated 19-May-2022. 2.3 That, the supplier in the present case has classified the goods under tariff Item 847141 90 charging IGST @ 18%. Heading 8471 of the GST/Customs Tariff covers "automatic data processing machines and units thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods under the description "Interactive Flat Panel (Automatic Data Processing Machines)". 3.3 Further, that the aforesaid goods are indeed ADPM and thus are classifiable under CTH 8471 41 90 for the reasons explained above and that CTH 8471 41 90 covers "Other" ADPM comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined. Relevant portion of CTH 8471 has been extracted below for reference: 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 *** - Other automatic data processing machines: 847141 -- Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined: *** 84714190 --- Other *** 3.4 that Note 5(A) under Chapter 84 defines the expression 'automatic data processing machines' as any machine capable of fulfilling the conditions specified therein. The relevant Note is extracted below for easy reference; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltaneously the conditions laid down in Note 5 (A) to this Chapter. That is to say, they must be capable of: (1) Storing the processing program or programs and at least the data immediately necessary for the execution of the program; (2) Being freely programmed in accordance with the requirements of the user; (3) Performing arithmetical computations specified by the user; and (4) Executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run. Thus, machines which operate only on fixed programs, i.e., programs which cannot be modified by the user, are excluded even though the user may be able to choose between a number of such fixed programs. These machines have storage capability and also stored programs which can be changed from job to job. Automatic data processing machines process data in coded form. A code consists of a finite set of characters (binary code, standard six bit ISO code, etc.). The data input is usually automatic, by the use of data media such as magnetic tapes, or by direct reading of original documents, etc. There may also be arrangements for manual input by me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.8 Therefore, for the purpose of being classified under CTH 8471 as an ADPM, a product must perform all the functions as listed under Chapter Note 5 (A) to Chapter 84. Further that the aforesaid goods satisfy all the aforesaid pre-requisites/conditions for the reasons tabulated below: Storing processing programme(s) for execution of programmes The aforesaid goods have an internal storage capacity of 16GB to 32GB. Thus, the aforesaid goods are machines capable of storing data or programmes for the execution of programmes. Thus, they satisfy the said condition (i) to Chapter Note 5 (A). Freely Programmable in accordance with the requirement of the user * According to HSN explanatory notes, machines which operate only on fixed programs are not ADPM. It further states that if a machine which operates on one or more programs and that none of the programs can be modified by a user to suit his requirements, then such machine is not an ADPM. * The aforesaid goods come with a pre-installed operating system i.e. Android 8.0. The said Android version is a customized operating system for the aforesaid goods. Further, they also have an OPS slot. With the use of the OPS Slot, in additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e; (c) Android Operating System along with CPS slot which supports Ubuntu 14.04 or above, Windows 7/8/8.1 /10. Mac OS X 10.12 or above; (d) The machine can be programmed or modified in the manner in which the user wants; (e) That the aforesaid goods can be used identically as a regular personal computer; (f) The touch screen display feature makes it possible for the user to work with the machine in close proximity. 3.11 In fact, the specification/features are strikingly similar to another form of ADPM, viz., all-in-one Personal Computer ("All in One PCs"). The following table captures the similarity between the aforesaid goods and two other models of All in One PCs which are available and known in the market as such: Specifications RP7502 HP All in One PC (HP 200 Pro G4 22) Lenovo All in One PC (Idea Centre AIO) System Features Operating System Android 8.0 [Compatible with Windows OS/Chrome OS / iOS /ubuntu) Windows 10 Pro Windows 10 Pro Processor Name Dual core A73+Dual core A53/1.5GHz (HV811) Intel Core i5-10210 (1.6 GHz) Intel Core i5-10400 (3.6 GHz) Memory Memory (RAM) 4GB 8 GB DDR4 8 GB DDR4 Storage Storage 32GB 1TB 7200 rpm SATA HDD 512 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Storage-Expandable using SD card 32 GB Internal Storage Weight 400 gms 61 KG Battery 5100 mAh. Rechargeable. Battery Life- 9-10 hours Power Supply AC 100 to 240V, 50 to 60 Hz Processing Functions It can process data, execute programs, and connect to the Internet via a wireless network in order to. for example, exchange and manage e-mails, exchange or download files, download software applications, conduct video or VoIP ("Voice over Internet It can process data, execute programs, and connect to the Internet via a wireless network in order to, for example, exchange and manage e-mails, exchange or download files, download software applications, conduct video, etc. Designed as a replacement for Laptop/Computer Yes Yes Recording and reproducing sound Can reproduce and record sound Can reproduce and record sound Using voice commands to control device (e.g., to send messages, take photos, set an alarm, check weather or schedules) Primarily operated by using its touch screen. Can also be operated by Voice Commands. Primarily operated by using its touch screen. Can also be operated by Voice Commands. Making and receiving calls Allows user to make/accept/decline calls, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The tablet computers are not intended to be a substitute for a mobile phone to make voice calls, but, according to its main technical features is designed as a substitute for laptops. The difference between a "Smartphone" and a "Tablet Computer", is not based on whether the product has a voice calling function or not, but on the principal features that a producer has intended for the device when designing and developing it. 3.18 Further, with respect to aforesaid goods being different from television set, the applicant furnished the differentiation between the goods under question & TV: - Features TV IFP Features No YES, 1.5 GhZ or Higher Processor Internal Storage No 32 GB or Higher SOC Internal Storage Touch Interactivity' No YES, IR Technology or PcaP technology based White Boarding Software No IN built for use in Classrooms and Meeting rooms, Digital format Saving option Emailing from Device No YES, Inbuilt with AMS and Account login support Toughened Glass No YES, 3.2 to 4mm thick toughened Glass for optimum use in classrooms and meeting rooms Ports - HDMI Out No YES, HDMI Out Inbuilt which can connected thru a cable for cascading what is on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m and accordingly, Shr. Jitendra Singh Khanuja, C.A.& authorized representative, of the applicant appeared before us for hearing on 10.08.2022 and reiterated their contention. 5. The legal position, analysis and discussion: - At the very outset, we would like to make it clear that the provisions for implementing the CGST Act and the Chhattisgarh GST Act, 2017 [hereinafter referred to as "the CGST Act and the CGGST Act"] are similar and thus, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the CGGST Act, 2017. Now we sequentially proceed to discuss the issues involved in the ruling so sought by the applicant and the law as applicable in the present case. 6. Section 96 of CGST Act, 2017, Authority for advance ruling, stipulates as under: - Subject to the provisions of this Chapter, for the purposes of this Act, the Authority for. advance ruling constituted under the provisions of a State Goods and Services Tax Act or Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory. Section 97(2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me as INTERACTIVE FLAT PANEL (Automatic Data Processing Machine) vide Document No. R-41151858 dated 6.2.2020 and document doted 17.2.2020 (inclusion document). Besides this the bill of entry summary issued by the Indian Customs, Chennai Port to the BenQ India Pvt. Ltd. Tamil Nadu (Importer) mentions the goods description as BENQ-9HF6YTK.DN4-(BIS REG R-41 164488) REGULATORY MODEL-RE650I BENQ INTERACTIVE FLAT PANEL RE6501WITH (ADPM )3GB RAM, A with HSN Code 84714190. 9. Thus, based on the above and the comparative details furnished by the applicant before this authority, it has been the contention of the applicant that their product namely BenQ Interactive Flat Panel RP7502 Black 75", received from supplier namely i.e., M/s. Benq India Private Limited merit classification under chapter heading 8471 leviable to 9% CGST and 9% SGST as stipulated under entry no. 360 to Schedule-III of Notification no. 01/2017-CT(Rate) dated 28.6.2017. 10. As regards the classification of goods under GST regime, the Central government on recommendation of GST council has notified the rate of applicable tax payable on goods vide notification no. 01/2017-CT (Rate) / Integrated tax (rate) dated 28/06/2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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. (B) Automatic data processing machines may be in the form of systems consisting of a variable number of separate units. (C) Subject to paragraphs (D) and (E), a unit is to be regarded as being part of an automatic data processing system if it meets all of the following conditions: (i) it is of a kind solely or principally used in an automatic data processing system; (ii) it is connectable to the central processing unit either directly or through one or more other units: and (iii) it is able to accept or deliver data in a form (codes or signals) which can be used by the system. Separately presented units of an automatic data processing machine are to be classified in heading 8471. However, keyboards, X-Y c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e II, (iii) 9 percent. In respect of goods specified in Schedule III, (iv) 14 percent. In respect of goods specified in Schedule IV, (v) 1.5percent. In respect of goods specified in Schedule V, and (vi) 0.125 percent. In respect of goods specified in Schedule VI appended to this notification (herein after referred to as the said Schedules), that shall be levied on intra-State supplies of goods, the description of which is specified in the corresponding entry in column (3) of the said Schedules, falling under the tariff item, subheading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedules. Schedule I -2.5% S.No. Chapter /Heading /Subheading/ Tariff item Description of Goods (1) (2) (3) 1 0202, 0203, 0204, 0205, 0206, 0207, 0208, 0209, 0210 All goods [other than fresh or chilled] and put up in unit container and, - (a).... bearing a registered brand name; or (b).... bearing a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily], subje ..... 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(including machines for nailing, stapling, glueing or otherwise assembling) for working wood, cork, bone, hard rubber, hard plastics or similar hard materials 356. 8466 Parts and accessories suitable for use solely or principally with the machines of headings 8456 to 8465 including work or tool holders, self-opening die heads, dividing heads and other special attachments for the machines; tool holders for any type of tool, for working in the hand 357. 8467 Tools for working in the hand, pneumatic, hydraulic or with self-contained electric or non-electric motor 358. 8468 Machinery and apparatus for soldering, brazing or welding, whether or not capable of cutting, other than those of heading 85125; gas-operated surface tempering machines and appliances 359. 8470 Calculating machines and pocket-size data recording, reproducing and displaying machines with calculating functions; accounting machines, postage-franking machines, ticket-issuing machines and similar machines, incorporating a calculating device; cash registers 360. 8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utomatic 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 else where specified or included. Thus, it becomes all the more important to ascertain as to whether the impugned BenQ Interactive Flat Panel RP7502 Black 75 on being supplied / traded by the applicant downstream, owing to it being programmed in a variety of ways thereby qualifying as machines capable of being freely programmed in accordance with the requirements of the user, has changed in functionality or not. The machine being Automatic data processing machine alone would not entitle it being classifiable under CH 8471, rather for it to fall under the said CH 8471 it must not be specified elsewhere or included. Thus, the certification of the impugned goods as Automatic data processing machine by BIS in itself is not sufficient to conclusive hold the classification of the impugned goods under CH 8471. To conclusive arrive at a decision regarding the eligibility or otherwise of the claimed classification, it is of paramount importance to ascertain whether each such machine is a machine performing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds which in the impugned case in hand is dependent on the functionality of the machine per se cannot be generalized and ascertainment of classification of goods is much dependent on the circumstances and adherence to the conditions stipulated. Further as already discussed in the preceding para, section 103 of CGST Act, 2017 stipulates about the ruling pronounced as under: - The advance ruling pronounced by the Authority or the Appellate Authority under this Chapter shall be binding only - a. On the applicant who had sought if in respect of any matter referred to in sub-section (2) of section 97 for advance ruling; b. On the concerned officer or the jurisdictional officer in respect of the applicant. Thus, in view of the above section 103 of CGST Act, 2017, the ruling given in the cited case would be binding only on the Applicant and on the concerned officer or the jurisdictional officer as stipulated above 12. In view of the above discussions we are of the considered view that it would be appropriate to conclude that BenQ Interactive Flat Panel RP75O2 Black 75", imported and subsequently supplied to the applicant by their supplier namely i.e., M/s Benq India Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and discussions as above, we pass the following order: - ORDER (Under section 98 of the Chhattisgarh Goods and Services Tax Act, 2017) No. STC/AAR/06/2022 Raipur Dated 17-08-2022 The ruling so sought by M/s Savex Technologies Pvt. Ltd., E-7/8, Sector-5, Devendra Nagar, Raipur, Chhattisgarh GSTIN: 22AAACS5547H2ZH the applicant is accordingly answered as under: - RULING (a) For the product BenQ Interactive Flat Panel RP7502 Black 75" being supplied / traded by the applicant to qualify under chapter heading 84714190, it must necessarily satisfy the stipulations as mentioned in the Section note and chapter note of Section XVI and Chapter 84 respectively, as discussed herein above. In case the impugned machine consisting of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the same as a whole would merit classification in the heading appropriate to that function. (b) The rate of tax applicable on such goods depends upon the classification of the same and the effecti ..... 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