2019 (2) TMI 192 – AUTHORITY FOR ADVANCE RULING, RAJASTHAN – TMI – Classification of goods/services – rate of tax – Air dryer complete with final filter for used in breaking system of locomotive supplied to Railway – Held that:- On going through HSN code 8421, it is observed that the Air dryers, which is used for removing water vapour from compressed air or to remove the moisture from wet substances has been classified under 8421 ibid. – Further, M/S Trident Pneumatics Pvt. Ltd., Coimbatore is a manufacturer and supplier of “Air Dryer (LD2000132) Locomotive Dryer-Il” as per the Invoice No. TPPL/3187/1718 dated 27.03.2018 invoiced to the applicant by classifying the said good under Chapter 8421 of the GST Tariff Act 2017 which attracts GST@18% (9% CGST + 9% SGST).
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In the light of the fact, classification of ‘Air Dryer’ (HSN 8421) has already been finalised at the supplier’s end who also happens to be manufacturer of the goods in question i.e. M/s. Trident Pneumatics Pvt. Ltd., Co
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services or both; Further, the applicant being a registered person, GSTIN is 08AFOPB8919C1ZE, as per the declaration given by him in Form ARA-01, the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above declarations, the application is admitted to pronounce advance ruling. 1. SUBMISSION OF THE APPLICANT: a. The applicant is a trader in Air dryer which is used by Railway in breaking system of locomotives. The applicant has received a purchase order number 69185017150035 dated 14.03.2018 from Western Railway for Air Dryer complete with final filter for MEMU DMC (02 quantity). b. The applicant also submitted few additional documents during the personal hearing along with copy of invoice (wherein goods are received by the applicant from the supplier-manufacturer, M/S Trident Pneumatics Pvt. Ltd., Coimbatore,) dated 27.03.2018. c. The applicant is engaged in supply of various goods to the railways. Such Goods suppl
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able under above heading. f. It is important to note here that the item supplied by the applicant can be used only for the purpose of railway locomotives. Based on this the most appropriate entry for the classification seems to be 86072100. g. The Applicant s opinion:- 1. The most appropriate chapter heading for classification of the goods in question seems to be chapter 86 based on its use. Still if we go by the rules of interpretation for tariff classification, then the rule 3 applies. Rule 3 is reproduced as below:- Rule 3: When by application of Rule 2 (b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be affected as follows: (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set pu
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the numerical order should be used for classification. 3. Thus by virtue of the classification based on the use of the material under chapter 86 sees to the most specific description and without prejudice to this as per rule 3(c) of Tariff Classification General Rules of Interpretation, chapter 86 seems for the purpose of classification. 4. Taxability These items fall under Chapter 86 of the Customs Tariff Act, 1975 under heading 8607 which reads as follows:- PARTS OF RAILWAY OR TRAMWAY LOCOMOTIVES OR ROLLING-STOCK Further, item fall under subheading 860721000 which reads as under: Air brakes and parts thereof The item mentioned as above is used in the Air Brakes of locomotives used by railway only. 5. For heading 8607 there is one entry of taxation in notification no. 01/2017 Central Tax (Rate) dated 28.06.2017, as amended from time to time; all of them are given below:- Chapter/Heading/Sub-heading/Tariff item Description of Goods CGST Rate (%) SGST/UTGST Rate (%) IGST Rate (%) Compen
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final filter for used in breaking system of locomotive supplied to Railway as per order attached given by Western Railway. 3. PERSONAL HEARING (PH) In the matter personal hearing was given to the applicant, Shri Mukesh Khandelwal, CA, (Authorised representative) of applicant appeared for personal hearing on 13.12.2018. During the PH they reiterated the submissions already made in the application for advance ruling along with few additional documents and requested that the case may be decided at the earliest. 4. COMMENTS FROM THE JURISDICTIONAL OFFICER: The jurisdictional officer, Deputy Commissioner, Circle-D, Jodhpur, SGST Rajasthan has submitted that the rate of Tax on Air Dryer is 18% in HSN code 8421. 5. FINDINGS, ANALYSIS & CONCLUSION: a. We find that, the applicant has received a purchase order number 69185017150035 dated 14.03.2018 from Western Railway for Air Dryer complete with final filter for MEMU DMC (02quantity). b. The definition of Air dryer as per Wikipedia means: A
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cesses that demand dry air: b. Telecomm industry (pressurizes its underground cables to repel moisture and avoid shorts) c. Painting d. Pneumatic tools e. Textile manufacturing f. Pneumatic control systems g. Feed air for zeolite type oxygen and nitrogen generators h. Dental office air i. Truck and train air brake systems. j. Submarine ballast tank blow systems (implemented on American submarines after USS Thresher (SSN-593) disaster). Thus it is concluded that the air brake can be used in train braking systems. d. Further, as per the description under the HSN code reproduced below:- (Centrifuges, Including Centrifugal Dryers; Filtering or Machinery and Apparatus, For Liquids or Gases) -Centrifuges, including centrifugal dryers: 8421.11 Cream Separators 8421.12-Clothes-dryers 8421.19-Others -Filtering pr purifying machinery and apparatus for liquids: 8421.21-for filtering or purifying water 8421.22 – for filtering or purifying beverages other than water 8421.23-OiI or petrol-filters fo
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TPPL/3187/1718 dated 27.03.2018 invoiced to the applicant by classifying the said good under Chapter 8421 of the GST Tariff Act 2017 which attracts GST@18% (9% CGST + 9% SGST). e. The applicant itself has cited Circular No. 30/4/2018-GST Dated 25.01.2018 issued by Tax Research Unit, Department of Revenue has also emphasised on point No. 4 which is reproduced below: 4. Accordingly, it is hereby clarified that; only the goods classified under Chapter 86, supplied to the railways attract 596 GST rate with no refund of unutitised input tax credit and other goods [falling in any other chapter], would attract the general applicable GST rates to such goods, under the aforesaid notifications, even if supplied to the railways. Since, the Circular No. 30/4/2018-GST Dated 25.01.2018 issued by Tax Research Unit, Department of Revenue categorically states that if any good is supplied to railways under chapter 86 then it attracts GST @ 5% with no refund of unutilised input tax credit and in case of
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