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TMI Blog2021 (4) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... ries in the respective Schedules of Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 as amended till date, for the purpose of the applicant's product in question reads as under: Sch. Sl.No. Chapter/Heading/Sub-Heading Description of Goods Rate of Tax (GST) II 228 9503 Toys like tricycles, scooters, pedal cars etc. (including parts and accessories thereof) [other than electronic toys] 6% The applicant has stated that the aforesaid Notification contains the following explanation: (iii) "Tariff item", "sub-heading" "heading" and "Chapter" shall mean respectively a tariff item, sub-heading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975). (iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. 3. The applicant has submitted that a perusal of the aforesaid provisions read with explanation to the Notification No.01/2017-Central Tax(Rate) shows that in order to determine the rate of CGST leviab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of all kinds: 9503 00 10 --- Of wood 9503 00 20 --- Of metal 9503 00 30 --- Of plastics 9503 00 90 --- Other 5. The applicant has submitted that as can be noticed from above that Customs Tariff Act, 1975 Chapter Heading No.9503 covers toys of various kinds for children. Tariff Item Nos.9503 00 10, 9503 00 20 and 9503 00 90 cover toys made of wood, plastics and metals. Tariff Item No.9503 00 90 is the residual entry under which other toys for children of similar nature (but not made of metal, wood or plastics) can be classified; that therefore, it is submitted, that the applicant's product i.e. Plastic toys, which are essentially made of PLASTIC, should be classified under Tariff Item No.9503 00 30 itself; that it can be said that as far as Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 as amended till date broadly classifies toys into two categories i.e. (1) Other than Electronic Toys and (2) Electronic Toys; that toys which are other than Electronic Toys attract CGST 6% and SGST 6% falling under Tariff heading 9503 00 30 whereas Electronic Toys attract CGST 9 % and SGST 9% falling under Tariff Heading 9503 00 90; that entry at Sr.No.228 is in relation to cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in the circumstances and in view of the above position of law, they request the Advance Ruling Authority to hold that the applicant shall be entitled to claim Input Tax Credit in relation to CGST-SGST charged separately in debit notes issued by the supplier in current financial year i.e. 2020-21, towards the transactions for the period 2018-19. 7. The applicant has asked the following questions seeking Advance Ruling on the same: "(1) What is the appropriate classification and rate of GST applicable on supply of the PLASTIC TOYS under CGST and SGST? (2) Can the applicant claim Input Tax Credit in relation to CGST-SGST separately in debit notes issued by the supplier in current financial year i.e. 2020-21, towards the transactions for the period 2018-19?" DISCUSSION & FINDINGS: 8. We have considered the submissions made by the applicant in their application for advance ruling as well as the arguments/discussions made by their representative Shri Nishant Shukla at the time of personal hearing. We have also considered the issues involved on which Advance Ruling is sought by the applicant. 9. At the outset, we would like to state that the provisions of both the Central Goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured by them would fall under 9503 00 30, we find it imperative to refer to Heading 9503 under Chapter 95 (Toys, games and sports requisites; parts and accessories thereof). Headings 9503 reads as under: 9503 TRICYCLES, SCOOTERS, PEDAL CARS AND SIMILAR WHEELED TOYS; DOLLS' CARRIAGES; DOLLS; OTHER TOYS; REDUCED-SIZE ("SCALE") MODELS AND SIMILAR RECREATIONAL MODELS, WORKING OR NOT; PUZZLES OF ALL KINDS 9503 00 - Tricycles, scooters, pedal cars and similar wheeled toys; dolls' carriages; dolls; other toys; reduced-size ("scale") models and similar recreational models, working or not; puzzles of all kinds: 9503 00 10 --- Of wood 9503 00 20 --- Of metal 9503 00 30 --- Of plastics 9503 00 90 --- Other 12. Chapter notes of Chapter 95 read as under: NOTES : 1. This Chapter does not cover : (a) Candles (heading 3406); (b) fireworks or other pyrotechnic articles of heading 3604; (c) yarns, monofilament, cords or gut or the like for fishing, cut to length but not made up into fishing lines, of Chapter 39, heading 4206 or Section XI; (d) sports bags or other containers of heading 4202, 4303 or 4304; (e) sports clothing or fancy dress, of textiles, of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 applies, inter alia, to articles of this heading combined with one or more items, which cannot be considered as sets under the terms of rule 3 (b) of the General rules for Interpretation of this schedule, and which, if presented separately, would be classified in other headings, provided the articles are put up together for retail sale and the combinations have the essential character of toys. 5. Heading 9503 does not cover articles which, on account of their design, shape or constituent material, are identifiable as intended exclusively for animals, for example, "pet toys" (classification in their own appropriate heading). SUB-HEADING NOTE Sub-heading 9504 50 covers : (a) Video game consoles from which the image is reproduced on television receiver, a monitor or other external screen or surface; or (b) Video game machines having a self-contained video screen, whether or not portable. This sub-heading does not cover video game consoles or machines operated by coins, banknotes, bank cards, tokens or by any other means of payment (sub-heading 9504 30). 13. As per the submission of the applicant, Chapter Heading No.9503 of the Customs Tariff Act, 1975 covers toys of var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edule VI On going through the aforementioned notification, we find that Sub-heading 9503 appears at Entry No.228 in Schedule-II of the said notification (wherein GST rate is 12% (6% SGST + 6% CGST). The same reads as under: Sr.No. Chapter/Heading/ Sub-heading/ Tariff item Description of goods 228. 9503 Toys like tricycles, scooters, pedal cars etc. (including parts and accessories thereof) [other than electronic toys] We therefore conclude that the Toys of plastic manufactured and supplied by the applicant fall under Sr.No.228 of Schedule-II of Notification No.01/2017-Central Tax(Rate) dated 28.06.2017 and the GST applicable on the said product is 12% (6% SGST + 6% CGST). 16. Now, the next issue to be discussed is whether the applicant can claim input tax credit of CGST-SGST charged separately in debit notes issued by the supplier in current financial year of 2020-21 towards transactions for the period 2018-19. As per the submission of the applicant, the supplier of the applicant is seeking to issue debit notes in relation to transactions entered into and goods supplied to the applicant during the period 2018-19 and the debit notes proposed to be issued are in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier. We have also gone through the Finance Bill No.12 of 2020 which was introduced in Parliament in 2020. On going through the same, we find that there is a proposal in Section-120 in the said Bill which proposes to omit the words "invoice relating to such" in sub-section (4) of Section-16 of the CGST Act, 2017 and reads as under: "120. In section 16 of the Central Goods and Services Tax Act, in sub-section (4), the words "invoice relating to such" shall be omitted." 18. Further, as per the submission of the applicant, the aforementioned amendment has received assent of the President of India on 27.03.2020. We have, therefore, gone through the relevant portion of sub-section(4) of Section-16 as appearing in the updated version of CGST Act, 2017 (updated as on 30.09.2020) i.e. after the assent of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead as "such invoice or debit note pertains". However, on going through the above as well as the submission of the applicant, we do not find it to be such a drastic or far reaching change affected by the Finance Bill, 2020 as interpreted by the applicant, as, irrespective of the fact as to whether the words "invoice relating to such" is connected to "debit note" or omitted, the fact remains that a debit note is always connected to the invoice and issued in relation to change in value of an invoice. Just because the words "invoice relating to such" connected to "debit note pertains" was omitted, does not mean that the relation of the debit note with the invoice has been cut off or that omission of the above words means, that the year in which the debit note was issued will be considered as the 'financial year' as per amended sub-section (4) of Section 16. Further, nowhere is it forthcoming from a plain reading of the said amended sub-section, that the intention of the Government, by omitting the words "invoice relating to such" from the words "invoice relating to such debit note pertains" in the said sub-section, was to disconnect the debit note from the original invoice so that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Tax Identification Number (GSTIN) of the supplier (b) nature of the document (credit note or debit note) (c) a consecutive serial number that is unique and should not exceed 16 characters, be in one or multiple series, contain alphabets, numerals or special characters such as hyphen, dash, symbolised as "-"respectively, and any combination thereof, unique for a financial year. (d) date of issue. (e) name, address and Goods and Services Tax Identification Number or Unique Identity Number, if registered, of the recipient. (f) name and address of the recipient and the address of delivery, along with the name of State and its code, if such recipient is un-registered. (g) serial number and date of the corresponding tax invoice or, as the case may be, bill of supply. (h) value of taxable supply of goods or services, rate of tax and the amount of the tax debited to the recipient and (i) signature or digital signature of the supplier or his authorized representative. 21. On going through the particulars to be contained in the debit note as per the e-flyer issued by the Board, it can be seen that as per entry (g) above, serial number and date of the corresponding tax inv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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