In re Action Construction Equipment Limited (GST AAR Haryana)
Question Raised– Whether the truck mounted cranes (TMC) will fall under the chapter heading 8426 or 8705?
Facts: The applicant raised the question of correct classification of one of their product namely Truck Mounted Cranes (TMC). The applicant submitted that they buy readymade trucks, say, Ashok Leyland, TATA, etc., and on these trucks they manufacture cranes which are mounted/fixed on these trucks. These cranes have lifting capacity of 20 tonnes, 25 tonnes, 40 tonnes, etc. These cranes are used for lifting heavy loads. The applicant raised the question as to whether these TMC will fall under the chapter heading 8426 or 8705.
Held: The product manufactured/supplied by the applicant, which is resultant of mounting/fixing of crane on readymade trucks/lorries bought by them from truck/lorry manufacturers such as Ashok Leyland, TATA, etc. and known as truck mounted cranes (TMC), is classifiable under heading 8705.
FULL TEXT OF ADVANCE RULING
1. The applicant has submitted that they are manufacturer of Cranes, Backhoe Loaders, forklifts. Motor Graders, Compactors, Tower Cranes, Tractors, Harvesters, etc. The applicant raised the question of correct classification of one of their product namely Truck Mounted Cranes (TMC). The applicant submitted that they buy readymade trucks, say, Ashok Leyland, TATA, etc., and on these trucks they manufacture cranes which are mounted/fixed on these trucks. These cranes have lifting capacity of 20 tonnes, 25 tonnes, 40 tonnes, etc. These cranes are used for lifting heavy loads. The applicant raised the question as to whether these TMC will fall under the chapter heading 8426 or 8705.
Comments of the concerned officer U/S 98(1) OF THE CGST/HGST ACT, 2017
2. The Deputy Excise & Taxation Commissioner (ST), Faridabad (West), vide letter dt.3545/CC-1/FBD(W) dt.19.03.2018, submitted the requisite comments as under:
That the dealer was registered dealer under HVAT Act, 2003 and a manufacturer of motor vehicle industry any other vehicle industry (EAC Code-12306). The dealer started manufacturing of hydraulic mobile tower cranes and truck mounted cranes in the year 2010. Now the dealer has sought advance ruling on whether the products truck mounted cranes fall under heading 8426 ship’s derricks: cranes including cable cranes, mobile lifting frames, straddle carriers and works truck fitted with crane OR 8705 special purpose motor vehicles, other than those principally designed for the transport of persons or goods (for example, breakdown lorries, cranes, lorries, fire fighting vehicles, concrete-mixtures lorries, spraying lorries, mobile workshop, mobile radiological units).
As per the report of the concerned assessing authority, the dealer either purchases trucks or are provided by the customers themselves, Cranes are manufactured by the dealer and are mounted/fixed on the trucks. The final product i.e. truck mounted tranes are used for unloading and loading of heavy material. It is a special purpose vehicle (crane lorry) which engaged in lifting/loading/unloading of heavy loads. However, the Product “Truck Mounted Crane” has got a specific mention in Entry no. 8426 as “Works Trucks fitted with a crane”.
Records,of personal hearing – 2nd Proviso to Section 98(2) of CGST/HGST Act, 2017
3. Personal hearing in the instant case was conducted on 09.04.18, which was attended by Sh Rajan Luthra , CFO and Sh Deepak Bhardwaj, Sr Manager( Indirect Taxation). He reiterated the submissions made in their application for advance ruling. After detailed discussions the decision was reserved which is being released today.
Discussions and findings of the Authority
4. The questions raised before the Authority for Advance Ruling have been elaborated in para 1 above. The only aspect to be decided in the instant case is whether the truck mounted cranes (TMC) being manufactured/supplied by the applicant will fall under the chapter heading 8426 or 8705. In order to examine this issue of classification, it is important to go through the relevant details of these chapter headings, as under:
