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2019 (2) TMI 1907 - AUTHORITY FOR ADVANCE RULING, UTTAR PRADESHClassification of goods - Vigilance Control Device (VCD) - Diagnostic Terminal (DT) - Master Controller System (MCS) - HELD THAT:- As per provisions of Note 1 of the Chapter 86, the items of following characteristics do not cover in Chapter 86 : (a) Railway or tramway sleepers of wood or of concrete, or concrete guide-track sections for hover trains (Heading 4406 or 6810); (b) Railway or tramway track construction material of iron or steel of Heading 7302; or (c) Electrical signaling, safety or traffic control equipment of Heading 8530. Thus, from Note 1 of Chapter 86 it is clear that electrical signaling, safety or traffic control equipments or Heading No. 8530 have been specifically excluded from purview of Chapter 86 - Furthermore, sub-heading 8530 includes the items with following characteristics: Electrical Signaling, Safety or Traffic Control Equipment for Railways Tramways, Roads, Inland Waterways, Parking Facilities, Port Installation or Airfields (Other Than Those of Heading 8608). The Goods are being classified under particular tariff item in accordance with General Rule for the interpretation of the Harmonized System. As per Rule 1, The titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require. From the characteristic of the Vigilance Control Device (VCD), Diagnostic Terminal (DT) & Master Controller System (MCS), chapter Notes, Classification Rules and above discussion; it appears that they all fall in Code 8530 10 10 of Customs Tariff Act, 1975 - the rate of GST on the items of sub-heading 8607 is 5% whereas it is 18% of the items of sub-heading 8530. It is also worth mentioning that the end use of the products by railways cannot be taken as a ground to determine the classification of the goods on question. As per the C.B.I. & C. Circular No. 30/4/2018-GST, dated 25-1-2018, regarding-clarification on supplies made to the Indian Railways classifiable under any chapter, other than Chapter 86. It is clarified that - (a) only the goods classified under Chapter 86, supplied to the railways attract 5% GST rate with no refund of unutilised input tax credit and (b) other goods (falling in any other chapter), would attract the general applicable GST rates to such goods under the aforesaid Notifications No. 1/2017-Central Tax (Rate), dated 28-6-2017, read with Notification No. 5/2017-Central Tax (Rate), dated 28-6-2017, even if supplied to the railways.
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