2019 (2) TMI 66 – AUTHORITY FOR ADVANCE RULINGS, KARNATAKA – TMI – Classification of traded item – Power Bank – Whether the “Power Bank”, traded by the Applicant, is classifiable under Heading 8504 40 90 as ‘Static Converter -Others’? – Held that:- The principal function of the instant product is to store the electricity in the battery of the said product and to supply the same when required. Hence it is pertinent to mention here that the battery in the Power Bank is the main / core part of the device and without the battery the Power Bank would not function in the required manner. The charge management system is an ancillary circuitry for Charging the battery and the voltage boost converter is also an ancillary circuitry to draw the current from the battery at the relevant rating, depends on the load of the device connected. The Power Bank can also be used in the absence of the said voltage booster system, in which Case only the prescribed / pre-determined rate of current only can be
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ant ORDER UNDER SUB-SECTION (4) OF SECTION 98 OF CENTRAL GOODS AND SERVICE TAX ACT, 2017 AND UNDER SUB-SECTION (4) OF SECTION 98 OF KARNATAKA GOODS AND SERVICES Tax ACT, 2017 1. M/s. Xiaomi Technology India Private Limited, Orchid – Block E, Embassy Tech Village/ Devarabisanahahalli, Marathaili Outer Ring Road, Bangalore – 560 103 having GSTIN number 29AARCS5667D1ZQ, have filed an application for Advance Ruling under Section 97 of CGST Act,2017,KGST Act, 2017 & IGST Act, 2017 read with Rule 104 of CGST Rules 2017 & KGST Rules 2017, in form GST ARA-01 discharging the fee of ₹ 5,000-00 each under the CGST Act and the KGST Act. 2. The Applicant is a Private Limited Company, registered under the Goods and Services Act, 2017, claims to be primarily engaged in trading of electrical and electronic goods such as Mobile Phones, Power Banks, Air Purifiers & other lifestyle products; imports as well as domestically procure the said Power Banks and sells the same under the brand
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The Voltage Booster Converter is a DC-to-DC power converter that steps up voltage from its input supply to its output i.e. load. It is a class of switched-mode power supply (SMPS) containing at least two semiconductors (a diode and a transistor) and at least one emery storage element i.e. a Capacitor, inductor or the two in combination. Filters made Capacitors (sometimes combination with inductors) are added to the output and input to reduce voltage ripples. The said converter detects the device being charged by the Mi Power Bank and adjusts the current to ensure the optimum level of current & voltage output, as per the load demand. The third component is a protective shell used for encasing the other components. It is of aluminum/ polycarbonate and is flame retardant. 4. The Applicant further submits that the Mi Power Bank performs the function of charging i.e it provides regulated output to compatible devices such as mobile phones tablets, Bluetooth speakers etc., It performs mai
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and the tariff entries relevant to the classification in the instant ease are 8504 40 90 in respect of static converters that are taxable at 18% of GST and 8507 60 00 in respect of electrical accumulators that are taxable at 28% of GST. 7. The Applicant further submitted that the terms used in the tariff are technical or scientific in nature and it sis a well settled principle of interpretation that where a word is used in tariff entry in a technical or scientific sense, then it must be construed according to its technical or scientific meaning. The applicant, based on the explanatory notes to the Harmonised Commodity Description and Coding System, under Chapter 8504, states that a static converter is an apparatus or a device that converts electric energy in order to adapt it for further use, A static converter essentially converts electric charge of a known frequency and voltage (input) into one having different frequency and voltage (output}, which can be higher or lower than the kno
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ort, issued by the Indian Institute of Technology (Banaras Hindu University), Varanasi wherein it is reported that Tower Bank can be considered as static converter and not only a charge accumulator . 7.2 The applicant, without prejudice to the above argument, put forth another argument, submitting that the Power Bank essentially performs dual function i.e. accumulation of energy & conversion of energy from DC to DC providing regulated output current; the principal function of the Power Bank is to ensure the charging of device; mere lithium-ion battery would not suffice to charge a device unless the battery is supported by a converter. Therefore the Power Bank has to be classified as per the converter contained therein, which performs the principal function of charging, in terms of Section Note 3 to the Section XVI of the Customs Tariff Act 1975. 7.3 The applicant wishes to draw the attention towards the rule 3(b) of General Rules of Interpretation of Customs Tariff and contends tha
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ff Act 1975 as well as The C,Ex., Tariff Act 1985. The Static Converter (UPSS) also is classified under 8504 in the GST regime and the explanatory notes to the Harmonised Commodity Description and Coding System to heading 85.04 supports the said Classification of the UPSS. 7.4 In View of the above, the applicant prays to clarify the classification of the Power Bank under tariff heading 8504, in the light of their analysis / arguments supra, technical report of IIT, Varanasi and judicial precedence on UPSS. FINDINGS & DISCUSSION: 8. We have considered the submissions made by the Applicant in their application for advance ruling as well as; the submissions made by Sri. Shivarajan K, Charted Accountant, the authorized representative during the personal hearing. We have also considered the issues involved on which advance ruling is sought by the applicant and relevant facts of the issue involved. 8.1 the Applicant, filed the instant application dated 17.05.2018 for advance ruling, seek
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o obtain output as per the load demand. Both the circuits are essentially enhancing the function of the main part i.e. Battery. Therefore the principal function of the said product is to store the electricity and supply the same i.e to charge the devices, connected to it. 8.3 Therefore it is clear from above that the principal function of the instant product is to store the electricity in the battery of the said product and to supply the same when required. Hence it is pertinent to mention here that the battery in the Power Bank is the main / core part of the device and without the battery the Power Bank would not function in the required manner. The charge management system is an ancillary circuitry for Charging the battery and the voltage boost converter is also an ancillary circuitry to draw the current from the battery at the relevant rating, depends on the load of the device connected. The Power Bank can also be used in the absence of the said voltage booster system, in which Case
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Delhi. 2001 (3) TMI 131 – CEGAT, NEW DELHI. The Applicant concludes with the argument that as the functions and components of UPSS are similar to that of Power Bank under examination, the Power Bank also merits classification under Chapter Head 8504 similar to that of UPSS. We proceed to examine the functions and components of UPSS vis-a-vis a Power Bank. The principal function of a UPSS is to act as an uninterrupted source of electric power. The electric stored in the battery of the UPSS is converted into A-C. power, by the inverter in it, and supplied. However it is not essential to have a battery in the UPSS and instead a generator could be used as a source of D.C. power. Therefore the battery is not the component defining the nature of UPSS. The mechanism of conversion of the DC power into AC power before supply constitutes the principal function of a UPSS. Accordingly it is classified as a Static Converter under Chapter Heading 8504. On the contrary a Power Bank, despite having a
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e accumulator s function of storing and supplying energy, or protect it from damage, such as electrical connectors, temperature control devices, and protective housings. They are classified in this heading even if they are designed for use with a specific device. It is clearly evident from the above explanatory note that accumulators are covered under heading 8507 whether or not they include any ancillary components which contribute to their function of storing and supplying electric energy. Further the. accumulators are classified under the heading 85.07 even if they are designed for use with a specific device. Therefore, even though the battery in the said Power Bank is attached to the ancillary circuitry of Voltage Booster System , for effective function of the said battery, the principal function of the said Power Bank remains the same i.e storing and supplying of electric energy and hence the said product merits classification of the heading 85 07. as an accumulator. 8.7 In this r
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