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TMI Blog2019 (7) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- STATEMENT OF RELEVANT FACTS HAVING A BEARING ON THE QUESTION (S) RAISED 1. M/s. Nexture Technologies Private Limited, situated at Gat No. 102, Milkat No 623/2 Ambethan, Chakan Tal, Khed Chakan, Pune; Maharashtra-410501 ("Applicant') is registered with jurisdictional authorities vide GSTIN 27AADCV8711DIZE and is, inter alia engaged in manufacture and supply of following goods ('impugned goods'): * Plastic handle for motor vehicle doors (Including lever handle) * Plastic fittings for such for motor vehicle's doors such as: * Bracket * Housing * Bracket housing * asket * tator * Glove box locking 2. It is pertinent to briefly discuss the nature, use and process employed for manufacture of impugned goods before we p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) stipulates the questions on which an advance ruling may be sought. An identical provision is contained in Section 97(2) of the Maharashtra Goods and Services Tax Act, 2017 (MGST Act'). Notable that clause (a) and (e) of Section 97(2) envisaging issues pertaining to classification, applicability of notification and determination of liability to pay tax squarely cover the instant issue. 1.2 Further, since the issue is novel and has not been dealt in any proceedings under the CGST Act and the MGST Act, the instant application merits consideration for advance ruling II. Applicant's understanding II.1 As per the Applicant's understanding, the impugned goods merit classification under Entry at S. No. 111 of Schedule III of Notification No. 1/2017-Central Tax (Rate) (Notification 1/2017') exigible to central tax at the rate of 9 per cent. (in toto goods and services tax rate of 18 per cent.). The relevant extract of entry is reproduced as under: III. 3926 plastics and articles of other materials of headings 3901 to 3914 (other than bangles of plastic, plastic beads and feeding bottles) III. Applicable provisions and analysis III.1 Section 9 of the CGST Act forming the charging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achwork or the like
3926 30 10
--- Of polyurethane foam
3926 30 90
--- Other
A.2 In order to classify impugned goods under Sub-Heading 3926 30, they must satisfy the description Fittings for furniture, coachwork or the like'. For this purpose, it is pertinent to delineate the scope of Sub-heading 3926 30.
A.3 Sub-heading 3926 30 covers fittings. The term fittings has not been defined in Customs Tariff Act or Notes appertaining to relevant Section and Chapter.
A.4 The meaning of term 'fittings' as obtained from various sources, are reproduced as under:
* The Oxford English Dictionary [accessible at X X X X Extracts X X X X X X X X Extracts X X X X ..... pable, either at the moment of polymerisation or at some subsequent stage, of being formed under external influence (usually heat and pressure, if necessary with a solvent or plasticiser) by moulding, casting, extruding, rolling or other process into shapes which are retained on the removal ofthe external influence." A.10 It is submitted that impugned goods are small parts and equipments fixed onto the door of an automobile. Further, the impugned goods are manufactured through moulding machines using PVC granules. These processes and ingredients are covered with the sweep of Note 1 to Chapter 39. Hence, by application of GRI 1, the impugned goods are squarely covered under the sweep of Sub-heading 3926 30. A.11 From the above, it is clear that impugned goods merit classification under Sub heading 3926 30, covered under Heading 3926 B. The impugned goods satisfy the description of goods B1. The entry at S. No. 111 under Schedule III of Notification 1/2017 covers Other articles of plastics and articles of other materials of heading 3901 to 3914'. It is trite law where a notification is based on tariff schedule, then the same may be imported for understanding the scope of descript ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y must not be excluded by the provisions of the Notes to Section XVII (see the corresponding General Explanatory Note) C.5 As per Note 2 to Section XVII, the expression 'parts' and 'parts and accessories will not include parts of general use as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastic (Chapter 39). Such parts shall not be classifiable as under Section XVII even if they are specifically identifiable as parts or parts and accessories for the goods of Section XVll. C.6 Further, the Explanatory Notes delineate the scope of above exclusion in following manner: "(A) Parts and accessories excluded by Note 2 to Section XVII This Note excludes the following parts and accessories, whether or not they are identifiable as for the articles of this Section: (1) Joints, gaskets, washers and the like, of any material (classified according to their constituent material or in heading 8484) and other articles of vulcanised rubber other than hard rubber (e,g, mudguard-flaps and pedal covers) (heading 4016) (2) Parts of general use as defined in Note 2 to Section XV, for example, cable and chain (whether or not cut to length or equipped with end ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tings and similar articles suitable for furniture, doors, staircases, windows, blinds, coachwork, saddlery, trunks, chests, caskets or the like (Section XV); or similar goods of plastics (Chapter 39), whether or not those parts are identifiable for goods of that section. Accordingly, similar parts (made of plastic) which are included in the term "parts of general use" shall not be treated as 'parts' or 'parts and accessories' of goods of Section XVII and are classifiable as goods of Heading 3926, HTSUS. Similarly, Cross ruling NYG84953 also classified various types of door handles (inside as well as outside) under Heading 3926. D.3 In cross ruling N096498, it was held that door handle component made of plastic is classifiable under Heading 3926 as HSN 3926.30.5000, HTSUS provides for other articles of plastics: fittings for furniture, coachwork or the like: other'. D.4 In cross ruling N020634, reliance was made on the legal note 2(b) to Section XVII which states that the expression "parts and accessories" does not apply to parts of general use, as defined in note 2 to section XV, of base metal or similar goods of plastics. Parts of general use include items of heading 8302, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HSN which covers 'Vehicles, Aircrafts and Associates Transport Equipment', B.2 The Applicant submits that as per the HSN Explanatory Notes to Heading g 708 [on Page No. 'XVII-8708-1' of the HSN] 1 (Page 25), this Heading covers only those parts and accessories which satisfy the following two criterias: (i) They must be identifiable as being suitable for use solely or principally with the motor vehicles; and (ii) They must not be excluded by the provisions of Section Notes of Section XVII B.3 It is important to highlight that Section Note 2 to Section XVII [Page No. 'XVII-1' of the HSN] (Page 27) stipulates that the expression 'parts' and 'part and accessories' shall not apply to some stipulated articles whether or not they are identifiable as for the goods of this Section. In other words, even if an item is identifiable as a part of motor vehicle, it will still not be classified as such if they fall under the stipulations contained in Section Note 2. B.4 Clause (b) of Section Note 2 inter-alia provides that 'parts of general use' as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39) shall not be treated as 'parts' or and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aulin b. For the purpose of determining classification under Notifications 1/2017-Central Tax (Rate) and 2/2017 Central Tax (Rate). Similarly, Explanation (iv) adopts the general rules for interpretation, Section Notes and Chapter Notes as provided in the Customs Tariff Act, 1975 for interpreting the Notifications. The First Schedule of the Customs Tariff Act, Chapter 39 covering 'plastics and articles thereof arise for consideration in the present instance, Comments: As above mentioned entry at s. BO-111 of schedule. II of notification no. 1/2017- Central Tax (Rate) (Notification 1/2017!) central tax at the rate of 9 per cent (accordingly goods and services tax rate of 18 per cent), also there is another entry at s.70.45 of schedule IV. of notification no. 1/2017-Central Tax (Rate) ('Notification 1/2017") to central tax at the rate of 1 4 percent. (accordingly goods and services tax rate of 28 per cent.) The relevant extract of entry is S.No. Chapter / Heading Subheading /Tariff item Description of Goods 111 3926 (other than 3926 40 11, 3926 90 10] Other articles of plastics and articles of other materials of headings. 3901 to 3914 (other than bangles of plastic, PVC B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to Section XVII As per Note 2 to Section XVII, the expression parts and parts and accessories' will not include parts of general use as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastic (Chapter 39). Such parts shall not be classifiable as under Section XVII even if they are specifically identifiable as parts or parts and accessories for the goods of Section XVII. "(A) Parts and accessories excluded by Note: 2 to Section XV! This Note excludes the following parts and accessories, whether or not they are identifiable as for the articles of this Section: (1) Joints, gaskets, washers and the like, of any material (2) Parts of general use as defined in. Note 2 to Section XV, cable and chain, nails, bolts, nuts, washers, cotters and cotter-pins, springs (including leaf springs for vehicles) such goods of base metals fall in Chapters 73 to 76 and 78 to 81, and Similar goods of plastics fall in Chapter 39), and locks, fittings or mountings for vehicle coachwork (e.g., made up ornamental beading strips, hinges, door handles, grip bars, foot rests, window opening mechanisms), number plates, nationality plates, etc. such goods of base metal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k, saddlery, trunks, chests, caskets or the like; base metal hat-racks, hatpegs, brackets and similar fixtures; castors with mountings of base metal; automatic door closers of base metal 8308: Clasps, frames with clasps, buckles, buckle clasps, hooks, eyes, eyelets and the like, of base metal, of a kind used for clothing, footwear, awnings, handbags, travel goods or other made up articles; tubular or bifurcated rivets, of base metal; beads and spangles, of base metals 8310: Sign-plates, name-plates, address-plates and similar plates, numbers, letters and other symbols, of base metal, excluding those of heading 9405 8306 : Bells, gongs and the like, non-electric, of base metal; statuettes and other ornaments, of base metal; photograph, picture or similar frames, of base metal; mirrors of base metal Impugned goods not covered According to above mentioned expressions hence not consider as Parts of General Use. so its fall under heading 8708 PARTS AND ACCESSORIES OF THE MOTOR VEHICLES Conclusion: The impugned goods are covered under Heading 8708, because As per explanatory Note 2 of Section XVII of Customs Tariff Act, 1975, the expression 'parts' and 'parts and accessories' will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehicles; and * They must not be excluded by the provisions of the Notes to Section XVII (see the corresponding General Explanatory Note) From the Notes to Section XVII, we see that the expression "parts" and "parts and accessories" (whether or not they are identifiable as for the goods of this Section), do not apply to parts of general use, as defined in Note 2 to Section XV of base metal (Section XV) or similar goods of plastic Chapter 39). In other words, the parts of general use will not be classified as parts of the goods of the section XVII that covers the chapters 86 (Railways), 87 (Automobiles), 88 (Aircrafts, Spacecrafts) and 89 (Ships and Boats), even if they are identifiable with the goods of these headings. Now it is essential to find out as to what are 'parts of general use'. The HSN in the Note 2 to Section XV gives a list Of 'parts of general use' as under : (a) Articles of headings 7307, 7312, 7315, 7317 or 7318 or similar articles of other base metals (b) ......... (c) Articles of headings 8301, 8302, 8308, 8310 and frames and mirrors of heading 8306. Once an item is a part of general use, it will be classified according to its constituent material as p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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