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2021 (10) TMI 1116 - AUTHORITY FOR ADVANCE RULING, TAMILNADUClassification of goods - four toys in which physical force is the primary action and have electronic circuits/parts for providing light, music, horn etc arc ‘electronic toys’ - whether these toys will be taxable at 18% GST as per Sl.No. 440 of Schedule-III of the rate Notification or ‘Other than electronic toys’ attracting 12% GST as per Sl.No. 228 of Schedule --II of the rate Notification - HELD THAT:- The applicant arc trading the ‘toys’, viz., Children’s Scooter, Smart Tri-cycle, Activity Ride-on and Kick Scooter, which they have been considering as ‘Toys - Other than Electronic’ and has applied the rate as specified under Sl.No. 228 of Schedule-II of the Rate Notification. These toys are advertised to help the Kids to develop the motor skills. It is evident that the Tricycles, Scooters, pedal cars, like the products in hand are to be classified under CTH 9503 only and the 8 digit classification in the Tariff is based on the material it is made of and classification is not provided based on whether it is operated manually or otherwise. The description of goods in entry Sl.No. 228 says ‘Toys like tricycles, Scooters, pedal cars, etc’ and at Sl.No. 440 above, states as ‘Electronic Toys like tricycles, scooters, pedal cars, etc’. Thus, we see that both the entries speaks of Tricycles, Scooters, Pedal Cars, while one gives the rate for ‘Toys’, the other gives the rate for ‘Electronic Toys’. “Electronic Toys” are not defined in the said Notification and also in the Customs Tariff made applicable to GST - In the case at hand, ‘Electronic Toys’ are not defined in the Notification and the applicable Tariff. In such a situation, there is no merit in importing the observation/decision based on a definition specific to a Notification. In the case at hand, it is seen that the Children Scooter, Activity Ride-on, Smart Tri- cycle and Kick Scooter, have an electronic circuit for flashing lights, playing music/sound and horn, which is either powered by the Battery housed in the toy or powered by the Induction force applied while playing with the toy. Thus all the four products consists of an electronic circuit as a part of the said ‘Toy’ - it is not that the Scooters, Tri-cycle and Ride-on necessarily should have flashing lights, music/sound supplied by an exclusive electronic circuit. In the kick scooters meant for children upto the age of 14, the electronic circuit available in the product is powered by the Induction force, i.e., when physical force is applied and the kick scooter is moved, the physical force induces electrical energy which powers the electronic circuit and the LED starts flashing, thus encouraging the children while help improving the gross motor skills. The products are designed to develop gross motor skills in as much as they are designed to use the physical force and can be enjoyed by either pedaling, or by pushing with the leg and also fine motor skills like blinking, discrete tasks of switching on/off the music:/light etc provided through the inbuilt electronic circuit, powered with the electrical energy (battery)/ induction force. Both the functions of the toys are targeted to develop a certain skill while amusing the child playing with it. Therefore, the products in hand are ‘Electronic Toys’ and the applicable GST Rate is as per Sl.No. 440 of Schedule-III of the Rate Notification. The products Children Scooter, Activity Ride-on, Smart Tri-cycle and Kick Scooter, in which physical force is the primary action and contains an in built electronic circuit, are ‘Electronic Toys’ and the applicable GST Rate is CGST @ 18% as per S1.No. 440 of Schedule III to Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017.
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