2018 (10) TMI 682 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2018 (18) G. S. T. L. 168 (A. A. R. – GST) – Classification of goods – rate of GST – Reactor used in Hand Pump for water disinfection – Whether the ‘Reactors’ are more appropriately classifiable under Chapter sub heading No. 8421 21 90 attracting CGST of 9%, SGST of 9% and IGST of 18% or otherwise?
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Held that:- The Reactor manufactured by the applicant is used to purify the water supplied by hand pumps. It may be mentioned here that the main function of a hand pump is to lift water from under the ground and make them available to the public. The hand pump does its work even without the presence of Reactors inside it. Hence it clearly appears that the Reactor is not an essential part of the hand pump – the basic function of the Reactor is ‘purifying the water’ which is different from the function Of the hand pump which is ‘withdrawal and delivery of water from the underground’.
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The said Reactors are not exclusi
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s other places like motorized pipelines, in buildings along with overhead tank, in swimming pools/ fountains, in sewage water treatment in townships, hotels, hospitals, etc. – Reactors have use as water purifier at several places in various pipelines for purification of water and not only in hand pumps. Therefore their claim that their Reactors be treated as parts of hand pumps is not correct.
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Reactor, in the case of the applicant is nothing but a filtering or purifying machinery/ apparatus for liquids. Apparatus used for filtering or purifying water falls under Heading 8421 21 attracting 9% CGST and SGST each. The Reactor is neither an Ion exchanger plant or apparatus, Household type filter and therefore would fall under the others category i.e. 8421 21 90, thus attracting 9% CGST and SGST each.
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Ruling:- The Reactors are classifiable under Tariff Heading 8421 21 90 of the GST Tariff – GST @ 9% each. Tax @ of 9% CGST and 9% SGST is applicable on the present goods. – GST-ARA
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reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the GST Act 02. FACTS AND CONTENTION – AS PER THE APPLICANT The submission (Brief facts of the case), as reproduced verbatim, could be seen thus – Applicant Company is Manufacturer of Reactor used in Hand pump for Water Disinfection. The Reactor harnesses fluid dynamics & kills microbes in water bore well hand-pump & motorized water lines-eliminating water borne diseases such as diarhea, cholera & typhoid. Function of the Product – The Taraltec Reactor for hand pumps harnessess fluid dynamics and kills microbes in water from bore well hand pump eliminating water borne diseases such as diarrhea, cholera & typhoid. The Reactor can be easily retrofitted into the India mark 2 model (the most widely used hand pump in the world) within an hour by
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Taraltech Reactors can take care of this, to above 99% microbe kill. STATEMENT OF RELEVANT FACTS Statement of applicants interpretation of law in respect of question raised on which Advance Ruling is sought. Since applicant s commodity is forming part of Hand Pump it should be classified as HSN No. 8413, 8413 91 as Hand pumps and parts thereof. 03. CONTENTION – AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- M/s. Taraltech Solutions Pvt. Ltd, 176, Udyog Bhavan, Sonawala Road, Goregaon (East), Mumbai 400063 (here in after referred to as the applicant ) has filed above detailed application under Section 98 of the Central Goods and Service Tax Act, 2017 read with Rule 104 (1) of the CGST Rules, 2017 seeking advance ruling on the Classification of goods i.e. Reactor used in Hand Pump for water disinfection. 2. The applicant state that they are manufacturers of reactor used in Hand pump for water disinfection. The Reactor harness fluid dynamics &
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pally with the machines falling under Chapter 8413. Applicant has been requested to furnish the product details to ascertain the nature and functions of the product. Authority may also like to direct the applicant to furnish the details as required. 4. As per the Harmonised Systems of Nomenclature (HSN) note – (II) part (Section Note 2) of the Section XVI in general parts which are suitable for use solely or principally with the machines or apparatus are classified under same heading. However, the said Rule does not apply to the parts which in themselves constitute an article covered by headings of the Section X VI, shall be classified in their own appropriate heading even if specially designed to work as part of specific machine. This HSN note particularly applies to heading 8413. Therefore, although catalogue and further details are required, from whatever sketchy details of the product provided by the applicant, it prima facie appears that the product in question will not fall under
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Rule 104 (1) of the CGST Rules, 2017 seeking advance ruling on the Classification of goods (i.e Reactor used in Hand Pump for water disinfection. 2. The applicant state that they are manufacturers of reactor used in Hand pump for water disinfection. The Reactor harness fluid dynamics & Kills microbes in water bore well hand pump & motorised water lines- eliminating water borne diseases such as diarrhoea, cholera & Typhoid. They further state that their commodity is forming part of Hand pump, it should be classified as HSN NO. 8413, 8413 91 as Hand pumps and parts thereof. 3. On scrutiny of the catalogue, designs & write up of the products viz., Reactor submitted by the assessee, the brief nature, characteristics of the said product appears to be as under:- i) The assessee is engaged in manufacture of Reactors , which is essentially used for purification of water being supplied from Hand Pumps. The Reactor is retrofitted on to the Bore well Hand pumps . According to the
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ant has further Stated that other application of the reactor in the pipe line are : i) to be fitted for wells, ponds, lakes etc to motorized pipelines. ii) to be fitted in buildings along with overhead tank. iii) swimming pools/ fountains. iv) sewage water treatment in townships, hotels, hospitals etc. From the above, it is felt that the reactors being manufactured are entirely different article having a different purpose and framing them under water pumps will not be correct as they are not meant to be solely used with Hand pumps. It has many other applications. Therefore, it does not appear to be classifiable under Chapter 8413.91 under the category of Hand Pumps and parts thereof . 5. Further, as per HSN Note-(II) part (Section Note 2) of the Section XVI in general parts which are suitable for use solely or principally with the machines or apparatus are classified under same heading. However, the said Rule does not apply to the parts which in themselves constitute an article covered
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%. 04. HEARING The case was taken up for preliminary hearing on dt. 1804.2018, With respect to admission or rejection of the application when Sh. Anjan Mukherjee, Director along with Sh. Sanjay Makhija and Sh. Amit Desai C.A. appeared and requested for admission of application as per their contentions made in ARA. It was requested to them to provide detailed catalogue along with write up with respect to its function and its use to ARA as well as Jurisdictional Officer. The jurisdictional officer, Ms. Anjana Srinivasan, Supt., Mumbai East Commissionerate, appeared and made written submissions. The application was admitted and final Hearing was held on 05.06.2018, Sh. Anjan Mukherjee, Director along with Sh. Sanjay Makhija and Sh. Amit Desai C.A. appeared and made written and oral submissions. The jurisdictional officer, Ms. Sunita Bhalerao Supt., Mumbai East Commissionerate also appeared and made written submissions. 05. OBSERVATIONS We have perused the records on file and gone through
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reof. We find that the Reactor manufactured by the applicant is used to purify the water supplied by hand pumps. It may be mentioned here that the main function of a hand pump is to lift water from under the ground and make them available to the public. The hand pump does its work even without the presence of Reactors inside it. Hence it clearly appears that the Reactor is not an essential part of the hand pump. On the basis of the submissions made by the applicant we find that the Reactors have a function which is entirely different from that of a hand pump. Further, a hand pump Will be able to deliver water without the Reactor and thus it can easily be seen that the Reactor cannot be considered as a part of the hand pump. Further, it is observed that the basic function of the Reactor is purifying the water which is different from the function Of the hand pump which is withdrawal and delivery of water from the underground . The applicant has also submitted that their Reactor can be us
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independent existence as that of a water purifier which can be used in other applications for purification of water. In view of the above, the Reactor does not merit classification under Chapter 8413.91 under the category of Hand Pumps and parts thereof . Further, as per HSN Note-(II) part (Section Note 2) of the Section XVI in general, parts which are suitable for use solely or principally with the machines or apparatus are classified under same heading. However, the said Rule does not apply to the parts which in themselves constitute an article covered by heading of the Section XVI, which shall be classified in their own appropriate heading even if specially designed to work as a part of specific machine. This HSN Note particularly applies to the heading No. 8413. Thus, it is also evident that, even if the present item is specifically designed for Hand Pump, it shall not merit classification under CTH 8413 91. Therefore, from the HSN, it is clear that parts though fitted in hand pum
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ation of water and not only in hand pumps. Therefore their claim that their Reactors be treated as parts of hand pumps is not correct. Now we take up the issue of classification of a Reactor. We reproduce relevant tariff Heading No. 8421.21.90 of the GST Tariff as under:- 8421 Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases – Unit GST RATES # GST RATES # GST RATES # GST RATES # CGST STATE/UTSGST/UTGST IGST Compensation Cess -Filtering or purifying machinery and apparatus for liquids : u 9% 9% 18% Nil 8421 21 For filtering of purifying water : u 9% 9% 18% Nil 8421 21 10 Ion exchanger plant or apparatus u 9% 9% 18% Nil 8421 21 20 Household type filters u 9% 9% 18% Nil 8421 21 90 Other u 9% 9% 18% Nil 8421 22 00 for filtering or purifying beverages other than water u 9% 9% 18% Nil 8421 23 00 Oil or petrol-filters for internal combustion engines u 9% 9% 18% Nil 8421 29 00 Other u 9% 9% 18% Nil We find that Reactor, in the cas
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