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2019 (7) TMI 1159 - AAR - GSTClassification of goods - rate of tax - Steel Mugs with a plastic outer body supplied by the applicant - Sl. No 184 of Schedule II of N/N. 1/2017 of Central Tax (Rate) dated 28th June, 2017 (as amended) - HELD THAT:- The subject product, even though a household article is not manufactured exclusively with the use of a single material. The materials used are iron/steel and plastics. In the present case, the product is manufactured using more than one substance [mainly steel (close to 75%) and for outer body plastic (with plastic and other components amounting to only 25% of the total cost of the product)]. In view of the provisions of Rule 3 (a), Chapter Headings 7323 and 3924, both appear to be equally specific in relation to the subject goods, in as much as the subject goods can definitely be treated as household articles and therefore we now have a look at Rule 3 (b), which states that composite goods consisting of different materials or made up of different components, (in this case iron & steel and plastics) and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. The subject Steel Mugs with plastic body are advertised and sold as steel mugs. It is the steel that gives the essential characteristic to the subject product. Liquids specially, is they are boiling are not preferred to be poured in plastic containers. Hence in such a case it would be appropriate to consider the element of steel as the major element which are used in such conditions. Further, the plastic with its varied colours would seem to be lending to only visual attraction of the steel mugs and the essential characteristic remains to be steel. The subject goods fall under Chapter Heading 7323, since according to us, the material which is giving the essential character to the steel cups with plastic body is the presence of steel, which is 75% of the total value and composition of the subject goods - the said product is therefore covered under Sr. No. 184 of Schedule II of Notification 1/2017 Central Tax (Rate) dated 28th June, 2017.
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