In re M/s. Power Build Private Limited (AAR Gujarat)
What is the HSN Code and GST Tax Rate of a product ‘Geared Motor’?
Tariff Heading 8483 does not cover Gear Boxes or other variable speed changers combined with a motor. Motor remain classified under Tariff Heading 8501 even when they are equipped with pulleys, with gears or gear boxes, of with a flexible shaft for operating hand tools.
Therefore, on the basis of the Explanatory Notes of HSN under Tariff Heading 8483 and 8501, it is evident that the product ‘Geared Motor’, which is an assembly product of the ‘Electric Motor’ and ‘Gear Box’, will appropriately fall under Chapter Heading 8501 of the Customs Tariff Act, 1975, and we hold so.
FULL TEXT OF AAR RULING IS AS FOLLOWS
The applicant M/s. Power Build Private Limited has submitted that in manufacturing of ‘Geared Motors’, Electric Motors are assembled with Gear Boxes manufactured by them. Commercially, a Gearbox cannot have any use without being rotated and coupled with motor affixed to it. Utility of motor is to facilitate the running of any machine or conveyors in industries, whereas the speed of motor is fixed and it needs to be controlled, Gears are used to control the speed of final machine. As many customers insist on the Geared Motor, wherein Electric Motor is assembled with the Gear Box and is sold and cleared as a ‘Geared Motor’. Motor in this case may be manufactured or bought-out item. They submitted that in the erstwhile regime of Central Excise, mere Gear Boxes were classified under HSN Code 8483 and Geared Motor under HSN code of 8501, and both their products were being taxed at 12.5% under Central Excise. They submitted that under the GST regime, the classification remains the same but rates of GST have changed; that HSN of Motor is 8501 which is taxed at the rate of 18% and Gear Box under HSN of 8483 which is taxed at the rate 28%. They referred to the descriptions given in Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and submitted that GST rate @ 18% would be applicable for Electric Motors (whether geared or otherwise). HSN Code of Electric Motors would be applicable for Geared Motors as well and accordingly they would be raising invoice to their customers under HSN Code of 8501 charging 18% of GST.
2. The applicant submitted that they are engaged in supplying ‘Geared Motor’, which is an assembly product of the ‘Electric Motor’ and ‘Gear Box’. Electric Motor is covered under HSN code 8501 attracting GST at 18%, while Gear Box falls under HSN code 8483 attracting GST at 28%, however, HSN code and tax rate for product ‘Geared Motor’ is not provided under law.
3. The applicant has raised following question for advance ruling in their application :-
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