2018 (12) TMI 648 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2019 (20) G. S. T. L. 188 (A. A. R. – GST) – Classification of an item – Friction Material Based Brake Lining and Pad – whether classified under CTH 6813 @ 18% List and Motor Vehicle Brakes and Parts classified under head 8708 comes under 28% List or otherwise?
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Held that:- From Explanatory Notes, it is evident that only friction material in different shape is classifiable under heading 6813 and that those mounted are specifically excluded from the purview of said heading.
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Applicant is a manufacturer of Disc Brake Pads which are used in Braking System of Passenger cars. From the manufacturing process flow chart we find that functional part on baking, grinding, machining and powder coating fitted on steel plate. This finished product is ready for being fixed in the brake system of cars – the impugned product is not covered by chapter Heading 6813.
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The undisputed fact of the present case is that Disc Brake
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Disc Brake Pads DBP is made up of High Capacity Friction Material, both Fibers and Minerals and separately rivet on to Brake Assembly of Motor Vehicles. At the outset, we would like to make it clear that the provisions of both the CGST Act and the GST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a 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 – FACTS OF THE CASE Friction Material Based Brake Lining and Pad are classified Under the Tariff Head 6813 comes under 18% List and Motor Vehicle Brakes and Parts classified under head 8708 comes u
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ss were discontinued. DESCRIPTION OF PRODUCTS. we at COMPO ADVICS (INDIA) PRIVATE LIMITED. Gut No. 325/1, Bhalgaon, Beed Road, Aurangabad. Dist. Aurangabad – 431 007 are engaged in manufacturing of Non Asbestos Disk Brake Pads in collaboration with Advics Japan. These Disk Brake Pads are used in Braking system of passenger Cars. We are presently manufacture different types of pads covering around 60 type of Cars. Statement containing the applicant's interpretation of law and/or facts. as the case may be, in respect of the questions(s) on which advance ruling is required We would like to know that under which HSN Code our Product to be classified. Under 6813 or under 8708 as there are different rate charged in both code. 03. CONTENTION – AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- SUBMISSION FOR ADVANCE RULLING APPLICATION SR.NO.10 DTD 13.04.2018. IN CASE OF COMPO ADVICS (INDIA) PVT.LTD. OF BHALGAON DIST AURANGABAD. GSTIN 27AAFCC4974P12X
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07.2017 attracts 28% GST i.e. SGST 14% CGST 14% Total 28%. Copy of the rate of tax as per tariff under the GST rules is enclosed herewith for ready reference. Further as per Excise Heading 6813 which speaks as under: Friction Material and Articles thereof (for example Sheets, Rolls, Strips, Segments, Discs, Washer, Pads) Not mounted, for Brakes, for clutches or the like with a basis of Asbestos, of other mineral substances or of Cellulose, whether or not combined The dealer Compo Advics (India) Pvt. Ltd of Aurangabad manufacturing products is Disc Brake Pads say Brake liner is used for Passenger Cars, SUVs and MUVS is rightly covered by Excise Tariff 8708 And rightly attracts GST 28% Thus, this office is of the opinion that the dealer's products is leviable under GST regime@ 28%. 04. HEARING The case was taken up for preliminary hearing on DT. 12.06.2018, with respect to admission or rejection of the application when Sh. Mohan Parashar, G. M. Accounts along with Sh. M Gandhi, taxat
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exist two competing entry with different HSN code Viz 6813 and 8708 and they are subject to different GST Rate. In order to ascertain correct HSN code, applicant has approached this authority with following question: With respect to chapter Heading 6813 applicant submits that there is specific mention that if, friction material is not mounted, and then the product would fall under Heading 6813. Applicant further submit that in this industry there is general understanding that the world 'Mounting' means mounting on the break system and thus the DBP manufactured by them would merit classification under HSN code 6813. In order to ascertain the correct classification of the product, we reproduce the relevant chapter Heading 6813 as below: S.No. Chapter/Heading Sub-heading Tariff Item Description as per Notification Heading Description in Custom Tariff Entire Customs Tariff Heading with sub-Heading and Tariff Item (1) (2) (3) (4) (5) 182B 683 Friction material and articles thereof (
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gh Explanatory Notes to the Harmonized System of Nomenclature, pertaining to chapter heading 6813. The relevant portion reads as follows:- ….owing to its high friction coefficient and its resistance to heat and wear, this material is used for lining brake shoes, clutch disc, etc., for vehicles of all kinds, cranes, dredges or other machinery… According to the particular use for which it is intended, friction material of this heading may be in the form of sheets, rolls, strips, segments, discs, rings, washers, pads or cut to any other shape… The heading excludes: (a)… (b) Mounted brake lining (including friction material fixed to a metal plate provided with circular cavities, perforated tongues or similar fittings, for disc brakes): these are classified as parts of the machines or vehicles for which they are designed (e.g. heading 8708) Thus, from the aforesaid Explanatory Notes it is evident that only friction material in different shape is classifiable under heading
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They must not be excluded by the provisions of Notes to chapter 87. (iii) They must not be more specifically included elsewhere in the nomenclature. The undisputed fact of the present case is that Disc Brake Pads are being used in Braking System of passenger cars and SUV Vehicles. Further we find that DBP is not excluded from the aforesaid chapter Notes and are exclusively used as parts of motor vehicles of heading 8701 to 8707 and as such merit classification chapter heading 8707. 06. In view of the extensive deliberations as held hereinabove, we pass an order as follows: ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-10/2018-19/B-66 Mumbai, dt. 11/07/2018 For reasons as discussed in the body of the order, the questions are answered thus – Question: – We would like to know that Whether under which HSN Code our Product (Disc Brake Pads DBP) to be classified under 6813 or under 8708 as there are di
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