In Re : M/s. Epcos India Pvt. Ltd.
GST
2018 (7) TMI 1419 – AUTHORITY FOR ADVANCE RULINGS, HARYANA – 2018 (15) G. S. T. L. 117 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, HARYANA – AAR
Dated:- 26-3-2018
ADVANCE RULING NO. 2 (IN APPLICATION NO. 2)
GST
Ms. Sangeeta Karmakar, Member CGST And Mr. Vijay Kumar Singh, Member SGST
For The Applicant : Sh. Ashok Patil, GM, Sh. Rajeev Kumar, Officer Taxation And Sh. Rakesh Chatbar, C.A. (PoA)
RULING
BRIEF FACTS OF THE APPLICATION
1.1 M/s Epcos India Pvt. Ltd.. Plot No.32. Sector-5,HSIIDC Growth Center Bawal-123501,Rewari (Haryana) [hereinafter referred to as “the applicant”], is holding Goods and Services Tax Identification Number 06AAACI6950Q1Z2 and has filed an application dt.26.12.2017, form GST ARA-01, for advance ruling under Section 97 of the Central Goods and Services Act, 2017/Haryana Goods and Services Act, 2017.
1.2 The applicant has submitted that they have made an additional investment in manufacturing o
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t of the mobile handset will, qualify to be classified under heading-85 having description “Parts for manufacture of Telephones for cellular networks or for other wireless networks'' attracting GST Rate of 12% (COST rate 6%, SGST rate 6%, IGST rate 12%) as mentioned under Serial No. 203 of Schedule lI of the Notification No. 1/2017 Central Tax (Rate) dated 28 June, 2017. Serial No. 203 of Schedule Il of the Notification No. 35/ST-2 dated 30th June, 2017 issued under Haryana Goods and Services Tax Act, 2017 and Serial No. 203 of Schedule II of the Notification So. 1/2017 Integrated Tax (Rate) dated 28 June 2017.
B. Whether the product 'Battery for Mobile Handset' whether it be separable or non-separable i.e.. whether it be detachable or non-detachable, when sold to the customers other than mobile handset manufacturers who does not use the same in manufacture of mobile handset, will qualify to be classified under heading-8507 having description.
“Electric accumulators, including separa
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03 of Schedule II of the respective notifications mentioned herein above under CGST Act. Haryana GST Act or IGST Act. However where the same is sold to the consumers who does not use it in manufacture mobile handset, would qualify to be classified under heading 8507 having description of “Electric accumulators, including separators therefor, whether or not rectangular (including square)'', attracting GST Rate of 28% (CGST rate 14%, SGST rate 14%, IGST rate 14%) as mentioned under Serial No. 139 of Schedule IV of the respective notifications mentioned herein above under CGST Act, Haryana GST Act or IGST Act.
1.6 In support of their contention, the applicant referred to GST Rate FAQ released in the CBEC website (http://www.cbec.gov.in/resources/htdocs-cbec/gst/GST-Rate%20FAQs%2027.072017%20 after% 20Fitment%20Committee.pdf, wherein under SI. No 20 against the question “What is the HSN code and GST rates for Battery for mobile handsets?”, it has been stated that “Battery for mobile hands
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ge that cellular phone cannot function without a battery. If that be so, the battery has to be considered as accessory, if not part/component, of cellular phone…”
1.9 (a) Based on the judgment state supra, the applicant has contended that Battery for mobile handsets whether the same is detachable/separable or non-detachable/non-separable from the mobile handset, when sold to the mobile handset manufacturers who uses the same to make it form part of the mobile handset, would qualify to be considered as a part of the mobile handsels and thus would attract GST Rate of 12% as mentioned under Serial No. 203 of Schedule II of the respective notifications mentioned herein above under CGST Act, Haryana GST Act or IGST Act: and
1.9.(b). Where the said Battery tor mobile handsets are sold to consumers/customers who do not use it in manufacture of mobile handset, would attract GST rate of 28% falling under HSN 8507 under Serial No. 139 of Schedule IV of the respective notifications mentioned
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ation No. 35/ST-2, dated 30th June, 2017 issued under Haryana Goods and Services Tax Act, 2017 and Serial No. 139 of Schedule IV of the Notification No. 1/2017 – Integrated Tax (Rate) dated 28 June 2017.
RECORDS OF PERSONAL HEARING – 2nd PROVISO TO SECTION 98(2) OF CGST/HGST ACT, 2017
3. During the personal hearing held on 14.03.2018, the applicant reiterated the submission made vide their application dt,26.12.2017.
DISCUSSIONS AND FINDINGS OF THE AUTHORITY
4.1 The questions raised before the Authority for Advance Ruling, have been elaborated in para 4.1 and 4.2 above. The first aspect to be decided in the instant case is, as to under which of the chapter headings of the Customs Tariff Act, 1985. the said product “battery for mobile handsets'', which is lithium-ion battery would be covered. In the various notifications mentioned in para 4above, which prescribe the rates of CGST on the goods in question, following has been provided vide an explanation:
Explanation. – For the pur
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to headings providing a more general description. In the instant case, lithium-ion mobile phone batteries, prima facie, appears to be covered under the following headings.
8507
ELECTRIC ACCUMULATATORS, INCLUDING SEPARATORS TH OR NOT RECTANGULAR (INCLUDING SQUARE)
8507 60 00
Lithium -ion
8517
TELEPHONE SETS, INCLUDING TELEPHONES FOR CELLULAR OTHER WIRELESS NETWORKS: OTHER APPARATUS
FOR THE TRANSMISSION OR RECEPTION OF VICE, IMAGES OR OTHER * \T c INCLUDING APPARATUS FOR COMMUNICATION IN A WIRED OR WIRELESS NETWORK (SUCH AS A LOCAL OR WIDE AREA NETWORK), OTHER THAN TRANSMISSION OR RECEPTION APPARATUS OF HEADING 8443, 8525, 8527 OR
8517 12
Telephones for cellular networks or for other wireless networks:
8517 70
Parts:
8517 70 10
Populated, loaded or stuffed printed circuit boards
8517 70 90
Other
Out of the above two, sub-heading 85076000, meant for lithium-ion battery, is more specific classification for the product under consideration and heading 85177090 is a general h
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n the Tariff. It was further clarified that the term “parts, components and assemblies of automobiles includes items like batteries, brake assembly, tyres, tubes and flaps, IC engines, ball bearing etc. Thus, it is established that it is not necessary that a part is to be classified in the same heading, in which the main item is covered.
4.5 In the case of State of Punjab v. Nokia India Pvt. Ltd. [2015(315)ELT162(SC), the Hon'ble Apex Court ruled that part is that item without which the main item cannot be operated.
4.6 We also find force in the contentions raised by the applicant that a mobile phone cannot function, cannot be operated without a battery, whether the same is detachable/separable or not. Hence, mobile phone batteries qualify as part of mobile phone and accordingly, we answer the questions raised by the applicant, as under:
4.7 The next point to be decided is that whether “battery for mobile handset” can qualify- for GST under S.No.203 of Schedule II of the Notificatio
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detachable, when sold to the mobile handset manufacturers who uses the same to make it form part of the mobile handset will, qualify to be classified under heading-85 having description “Parts for manufacture of Telephones for cellular networks or for other wireless networks” attracting GST Rate of 12% (CGST rate 6%, SGST rate 6%, IGST rate 12%) as mentioned under Serial No. 203 of Schedule VI of the Notification No. 1/2017 Central Tax (Rate) dated 28 June, 2017, Serial No. 203 of Schedule II of the Notification No. 35/ST-2 dated 30th June,2017 issued under Haryana Goods and Services Tax Act, 2017 and Serial No. 203 of Schedule II of the Notification No. 1/2017 Integrated fax (Rate) dated 28 June 2017.
5.B. The product 'Battery for Mobile Handset', when sold to the customers other than mobile handset manufacturers who does not use the same in manufacture of mobile handset, will qualify to be classified under heading-8507 having description Electric accumulators, including separators t
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