In re Starlink Satellite Communication Private Limited (CAAR Delhi)
In In re Starlink Satellite Communication Private Limited, the Customs Authority for Advance Rulings, Delhi examined an application seeking an advance ruling on the classification and applicable customs duty for “Racks” (such as Rack V2.2) proposed to be imported into India. The applicant proposed to enter the business of internet distribution services and intended to import Racks for captive consumption at its gateway sites. These Racks, housed in aluminium enclosures, function as power distribution systems supplying electricity to antennas and networking equipment. They include components such as power distribution units (PDUs), uninterrupted power supply (UPS) systems, circuit breakers, plugs, connectors, sensors, and controllers, and are imported as complete units without networking equipment installed.
The applicant sought clarity on whether the Racks were classifiable under Customs Tariff Heading (CTH) 8537 10 90 and whether they were eligible for concessional basic customs duty (BCD) at 7.5% under the relevant exemption notification. The Authority examined the nature, components, and principal function of the Racks, emphasizing that classification must be determined based on the condition and function of the goods at the time of import.
After considering competing tariff headings—8504 (static converters), 8517 (telecommunication apparatus), 8543 (residual electrical apparatus), and 8537 (boards, panels, cabinets for electric control or distribution)—the Authority found that the principal function of the Racks was distribution of electricity. Although the Racks incorporated a UPS system, this was held to be an ancillary function and not determinative of classification. The Racks did not perform any networking or telecommunication function in their imported condition, ruling out classification under Heading 8517.
