2018 (6) TMI 515 – AUTHORITY FOR ADVANCE RULINGS, GUJARAT – 2018 (14) G. S. T. L. 85 (A. A. R. – GST), [2018] 2 GSTL (AAR) 88 (AAR) – Classification of goods – Geared Motors – applicable rate of GST – Whether ‘Geared Motor’ falls under Chapter Heading 8483 or 8501 of the Customs Tariff Act, 1975? – Held that:- The Tariff Heading 8483 does not cover Gear Boxes or other variable speed changers combined with a motor. Motor remain classified under Tariff Heading 8501 even when they are equipped with pulleys, with gears or gear boxes, of with a flexible shaft for operating hand tools – On the basis of the Explanatory Notes of HSN under Tariff Heading 8483 and 8501, it is evident that the product ‘Geared Motor’, which is an assembly product of the ‘Electric Motor’ and ‘Gear Box’, will appropriately fall under Chapter Heading 8501 of the Customs Tariff Act, 1975.
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Ruling:- The product ‘Geared Motor’ is classifiable under Chapter Heading 8501 of the Customs Tariff Act, 1975 and Goods and
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factured or bought-out item. They submitted that in the erstwhile regime of Central Excise, mere Gear Boxes were classified under HSN Code 8483 and Geared Motor under HSN code of 8501, and both their products were being taxed at 12.5% under Central Excise. They submitted that under the GST regime, the classification remains the same but rates of GST have changed; that HSN of Motor is 8501 which is taxed at the rate of 18% and Gear Box under HSN of 8483 which is taxed at the rate 28%. They referred to the descriptions given in Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and submitted that GST rate @ 18% would be applicable for Electric Motors (whether geared or otherwise). HSN Code of Electric Motors would be applicable for Geared Motors as well and accordingly they would be raising invoice to their customers under HSN Code of 8501 charging 18% of GST. 2. The applicant submitted that they are engaged in supplying Geared Motor , which is an assembly product of the Electri
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Code with GST Rate of duty is mentioned below : Sl. No. Name of Inputs HSN Code Rate of GST 1 Electric Motor 8501 18% 2 Bearing 8482 28% 3 Casting 7428 28% 4 Steel Round Bar 7206 18% 5 Fastener 7318 28% 6 Oil Seal 4016 28% 7 Oil 3403 28% Process of Manufacturing : The process is explained as – Gear Box a. Casting of Gear Case machined on CNC Horizontal Machining Centre. b. Steel Round Bar undergoes series of manufacturing processes like cutting, turning, keyways, hobing, heat treatment, skiing etc. c. Gear Box becomes mechanical product. Geared Motor Assembly of Electric Motor with Gear Box becomes Geared Motor which is electrical product. End use of the product : In general, Gear Box are assembled with the Electric Motor and used in following industries – a. Agriculture b. Pharma c. Cement d. Pulp and Paper e. Fertilizer f. Textile g. Rice Mill h. Food Industries 4.2 It is submitted that from the above inputs, process and end use of the product, it is inferred that the Geared Motor i
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& torque of an electric motor. Accordingly, it is noted that the correct applicability of HSN code of product Geared Motors fall under HSN 8483 4000 specifically which is described as Gears and Gearing, other than toothed wheels, chain sprockets and other transmission elements presented separately, ball or roller screws; gear boxes and other speed changers, including torque converters . Accordingly, it will be taxable under Schedule IV of GST Act with 28% of GST rate. 5.1 The Assistant Commissioner, State Tax, Ghatak-51, Anand informed that Geared Motor is an assembly product of Electric Motor and Gear Box . Electric Motor falls under HSN 8501 and attracts GST rate of 18% whereas Gear Box falls under HSN 8483 and attracts GST rate of 28%. There is no specific entry for Geared Motor in GST Schedule. 5.2 It is further informed that by assembly of Gear Box and Electric Motor , a distinct product Geared Motor is manufactured, which has no direct use, but it is used as parts in Machine
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ile Gujarat VAT Act, but under GST schedule, different rates are applicable for different machineries. 5.5 In view thereof, as the Geared Motor is used in (i) Automobile Sector, (ii) Machinery, (iii) Home Appliances and (iv) Tools, and which Geared Motor is used in which types of industries is not clear from the application, it has been opined that that product Geared Motor is classifiable under respective commodity parts on the basis of use in specific commodity (HSN – 8428, 8509, 8708, 8483). 6. We have considered the submissions made by the applicant in their application for advance ruling as well as at the time of personal hearing on 15.11.2017. We have also considered the information and views submitted by the Commissioner of Central Excise & GST, Vadodara – I Commissionerate and the Assistant Commissioner, State Tax, Ghatak-51, Anand. 7.1 The issue involved in this case pertains to classification of the product Geared Motor i.e. whether Geared Motor falls under Chapter Headin
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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. 7.3 Further, Hon ble Supreme Court in the case of L.M.L. Ltd. Vs. Commissioner of Customs [Civil Appeal No. 3764 of 2003, decided on 21.09.2010 reported at 2010 (258) ELT 321 (S.C.)] has held as follows :- 12. In Collector of Central Excise, Shillong v. Wood Crafts Products Ltd. reported in (1995) 3 SCC 454, it was held by this Court that as expressly stated in the statements of objects and reasons of the Central Excise Tariff Act, 1985, the Central Excise Tariffs are based on the Harmonious System of Nomenclature (HSN) and the internationally accepted nomenclature was taken into account to reduce disputes on account of tariff classification. Accordingly, for resolving any dispute relating to tariff classification, a s
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nclature provides as follows :- (E) GEAR BOXES AND OTHER SPEED CHANGERS, INCLUDING TORQUE CONVERTERS These provide a range of speeds which can be varied, either by hand or automatically, according to the requirements of the machine. They include, inter alia : (1) Gear-boxes consisting of assemblies of gears which can be selected in alternative arrangements; the speed of transmission can thus be varied according to the arrangement of gears set. (2) …… (3) …… …… The heading does not cover gear boxes or other variable speed changers combined with a motor; these are classified in the same heading as the motor. [underlining supplied] 8.3 The Explanatory Notes for Electric Motors under Tariff Heading 8501 of the Harmonised System of Nomenclature, inter-alia, provides as follows :- (I) ELECTRIC MOTORS Electric motors are machines for transforming electrical energy into mechanical power. ……… (A) ……… Motors rema
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