2018 (12) TMI 143 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2019 (20) G. S. T. L. 461 (A. A. R. – GST) – Classification of goods – Fan Coil unit – Whether the Fan Coil unit is covered under HSN Code 8418 under Goods and Service Tax Act, 2017?
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Held that:- Fan Coil Unit (FCU) is a simple device consisting of a heating and or cooling heat exchanger or ‘Coil’ and fan. It is a part of HVAC system found in residential, commercial and industrial buildings. A FCU is a diverse device sometimes using ductwork and is used to control the temperature in space where it is installed or serve multiple spaces. It is controlled either by a manual on/off switch or by a thermostat which controls the throughput of water to the heat exchanger using a control valve and/or the fan speed – FCUs circulate hot or cold water through a coil in order to condition a space. The unit gets its hot or cold water from a central plant or mechanical room containing equipment for removing heat from the central bu
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for Refrigerators and Freezers, whereas the basic function of a FCU is conditioning the temperature of a place or space and not freezing or refrigerating and therefore FCU would appropriately be covered under CTH 8415.
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Ruling:- The Fan Coil Unit is not covered under HSN Code 8418 but under HSN Code 8415 under Goods and Service Tax Act, 2017 – GST-ARA- 64/2018-19/B-125 Dated:- 3-10-2018 – SHRI B.V. BORHADE, AND SHRI PANKAJ KUMAR, (MEMBER) PROCEEDINGS (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by Bhutoria Refrigeration Private Limited, the applicant, seeking an advance ruling in respect of the following issue. Whether the Fan Coil unit is covered under HSN Code 8418 under Goods and Service Tax Ac
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parts and accessories. A Fan Coil Unit (FCU) is a simple device consisting of a heating and/or cooling heat exchanger or coil and fan. It consists of three basic components fan motor, heat exchanger and PCB which is connected with the valves to control the flow of water as per the set temperature. FCU are used as the terminal units for centralised System for heat exchanging. FCU consists of the following components: Fan Motor and Fan Blower: Fan motor is used for rotating impeller of the fan blower at certain rpm to provide desired air volume for specific capacity of unit. Fan blower could be with plastic impeller or metal impeller depending on requirement. The Fan speed can be changed through PCB of unit. Heat Exchanger: Heat exchangers are group of copper coils arranged in rows with aluminium fins, where copper tubes carry chilled water, which absorbs heat from air passed over it by fan motor. PCB: PCB is the printed circuit board, also the brain of the Fan Coil Unit. It controls the
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applicant is liable to pay GST at applicable rate upon the supplying of the aforesaid FCU to its customers. STATEMENT CONTAINING APPLICANT S INTERPRETATION OF LAW AND/OR FACTS, AS THE CASE MAY BE, IN RESPECT OF QUESTION(S) ON WHICH ADVANCE RULING IS REQUIRED. 1. That the applicant is registered under GST primarily to pay GST on the outward supply of Refrigerating equipments/ parts such as Fan Coil Unit, Valves, Actuator, Thermostat, etc. 2. That the applicant is engaged to supply Fan Coil Unit with standard spare parts and accessories 3. That in the instant case, Fan Coil Unit (FCU) is a device consisting of three basic components fan motor, heat exchanger and PCB which is connected with the valves to control the flow of water as per the set temperature. FCU is used to freeze the water, supplied through pumps, to cool the area where the machine is installed. 4. That as per the General Rules of Interpretation to the First Schedule of Customs Tariff Act 1975, goods are to be satisfied ac
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rvice Tax Act, 2017 and GST will be charged @18%. 8. That the applicant prays before Hon ble Authority to pronounce the ruling, i.e. the appropriate HSN Code for the Chilled Water Fan Coil Unit in the instant case, based on the interpretation of law; 9. That the applicant craves leave to add / modify any of the above ground during the course of hearing 03. CONTENTION – AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- 04. HEARING The case was taken up for Preliminary hearing on 04.09.2018 when Shri Mahesh Bhattar, C.A., along with Ms. Nikita Mehta, C.A. appeared and made contentions for admission of application . Jurisdictional Officer Sh. Hemant Deokate, Dy. Commr, Of S.T.(E-501) Nodal division – 10, Mumbai was appeared and stated that they will make submissions in due course. The application was admitted and called for final hearing on 19.09.2018, Sh. Mahesh Bhattar, C.A., along with Ms. Nikita Mehta, C.A. and Sh. K. K. Saraf, Advisor and Sh. Ma
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n motor is used for rotating impeller of the fan blower at certain rpm to provide desired air volume for specific capacity of unit. Fan blower could be with plastic impeller or metal impeller depending on requirement. The Fan speed can be changed through PCB of unit. 2. Heat Exchanger: Heat exchangers are group of copper coils arranged in rows with aluminium fins, where copper tubes carry chilled water, which absorbs heat from air passed over it by fan motor. 3. PCB: PCB is the printed circuit board, also the brain of the Fan Coil Unit. It controls the fan speed and water flow depending upon logic as per set mode, set temperature, room temperature and in some cases also water temperature. There are different modes like cooling, dry, heat or fan mode depending upon the application of the unit. 4. Main Drain Pan: Main drain pan are used for collecting condensate water generated at the heat exchanger during process of cooling. This water is drain out through drain pan through drainage lin
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first of all see as to what is a FCU, what is its use and whether it itself has independent existence and use and where it is actually used i.e whether in Air Conditioning or Refrigeration. We find that Fan Coil Unit (FCU) is a simple device consisting of a heating and or cooling heat exchanger or Coil and fan. It is a part of HVAC system found in residential, commercial and industrial buildings. A FCU is a diverse device sometimes using ductwork and is used to control the temperature in space where it is installed or serve multiple spaces. It is controlled either by a manual on/off switch or by a thermostat which controls the throughput of water to the heat exchanger using a control valve and/or the fan speed. Due to their simplicity and flexibility, FCUs can be more economical to install than ducted 100% Fresh Air Systems (VAV) or Central Heating Systems with air handling units or chilled beams. FCUs circulate hot or cold water through a coil in order to condition a space. The unit
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equipment and neither are heat pumps and therefore in no way they would fall under GST Tariff Heading 8418. Now we proceed to verify if FCU has a specific Tariff Heading Entry in CTH or Customs Tariff Heading where they would be specifically and clearly covered. On detailed examination and verification we could not locate any specific Tariff Heading under GST where FCUs would be covered. In view of this we are constrained to ascertain the classification of FCU as per their nature and equipment of which they are specific parts and without which the main equipment cannot be stated to have come into existence. In view of this now we have a look at the GST Tariff Heading 8415 which reads as under:- 8415 – Air Conditioning machines, comprising a motor driven fan and elements for changing the temperature and humidity, including these machines in which the humidity cannot be separately regulated. From the detailed discussions about the exact nature and as to of which equipment the FCU is a p
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or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517; (c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548. Further we find that the plea of the applicant contending that their goods would be covered under 8418 on the basis of the Hon ble Supreme Court s decision in 2006(7) TMI- Supreme Court of India in the case of CCE Delhi versus Carrier Aircon Ltd. is not sustainable in view of the facts that the goods chillers as discussed in this judgement had the basic function of chilling the water and were thus held by the Hon ble Supreme Court to fall in Heading 8418 for Refrigerators and Freezers. But we find that the basic function of a FCU is conditioning the temperature of a place or space and not freez
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