In re Maini Precision Products Ltd. (GST AAR Karnataka)
Question 1- Whether the ‘Parts of Fuel Injection Pumps’ are classifiable under Tariff Heading 8413 91 90?
The Parts of Fuel Injection Pumps for diesel engines are classifiable under Tariff Heading 8413 91 90 as per the Customs Tariff Act, 1975
Question 2- Whether the applicable entry in Notification No. 1/ 2017 – Integrated Tax (Rate), is 453 of Schedule III, for parts of fuel injection pumps, attracting a levy of 18%?
The “Parts of Fuel Injection Pumps for diesel engines” are covered under the entry no. 453 of Schedule III of Notification No.1/ 2017 -Integrated tax (Rate) dated 28.06.2017 and hence liable to tax at 18% under the Integrated Goods and Services Tax Act, 2017.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, KARNATAKA
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 Maini Precision Products Ltd, (called as the ‘Applicant’ hereinafter), having its registered office at B-165, Peenya Industrial Estate, 1st Stage, 3rd Cross, Bengaluru 560058, having GSTIN number 29AABCM8269R1ZF, has filed an application for Advance Ruling under Section 97 of CGST Act, 2017, KGST Act, 2017 read with Rule 104 of CGST Rules 2017 & KGST Rules 2017, in form GST ARA-01 discharging the fee of Rs.5,000-00 each under the CGST Act and the KGST Act.
2. The Applicant is a private limited company engaged in the manufacture and supply of High Precision Components and Assemblies, catering to a global clientele in the automotive, industrial and aerospace sectors. The applicant manufactures and supplies a wide range of products including sub-assembly products, precision machined components, industrial castings, metal forgings, vacuum formed parts, engine parts, transmission parts, parts of fuel injection pumps. The question on which advance ruling is sought is as follows:
(I) “Whether the ‘Parts of Fuel Injection Pumps’ are classifiable under Tariff Heading 8413 91 90?
(II) Whether the applicable entry in Notification No. 1/ 2017 – Integrated Tax (Rate), is 453 of Schedule III, for parts of fuel injection pumps, attracting a levy of 18%?
3. The applicant furnishes some facts relevant to the stated activity:
a. The applicant states that he is engaged in the manufacture and supply of High Precision Components and Assemblies, catering to a global clientele in the automotive, industrial and aerospace sectors. The applicant manufactures and supplies a wide range of products including sub-assembly products, precision machined components, industrial castings, metal forgings, vacuum formed parts, engine parts, transmission parts, parts of fuel injection pumps.
b. The applicant submitted that section 97(2)(b) of the KGST Act provides that the question in respect of which Advance Ruling is sought shall be inter-alia in respect of the applicability of a notification issued under the provisions of the GST Act and in respect of determining the classification of goods to be supplied by the applicant and since the applicant is seeking to determine the applicability of Schedule I of Notification No. 01/2017- I.Tax (Rate) dated 28.06.2017 to the supplies of ‘parts of fuel injection pumps’ to be made by the applicant and consequently, the rate of tax applicable on such supplies, their application is maintainable.
c. The applicant submits that Explanation (iii) of Notification No.01/2017- IGST (Rate) provides that “Tariff item”, “sub-heading”, “heading” and “Chapter” shall mean respectively a tariff item, subheading, heading and chapter as specified in the First Schedule to the Customs Tariff Act, 1975. Further, Explanation (iv) provides that the rules for interpretation of the First Schedule to the Customs Tariff Act, 1975 including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this Notification.
d. The applicant submits that the application is preferred for the purpose of adoption of the appropriate rate of tax as different goods falling under Heading 8413 have been placed under various Schedules Sl. No. 231 of Schedule I, Sl. No. 192 of Schedule II or Sl. No. 317A of Schedule III and Sl. No. 117 of Schedule IV of Notification No. 1/ 2017 – Integrated Tax (Rate). Further Sl. No. 453 of Schedule III covers goods falling under any Chapter which are not covered by any of the entries in Schedule I, II, IV, V and VI also becomes relevant for the Heading 8413.
e. The applicant submits that ‘parts of the fuel injection pumps for diesel engines’ shall fall under Tariff Entry 8413 91 90. He has reproduced the entries pertaining to the Heading 8413 in the Customs Tariff Import Schedule for reference. The applicant claims that it becomes evident that the said parts of the ‘fuel injection pumps for diesel engines’ shall fall under the head 8413 91 which deals with “parts” of pumps. Under the head, the ‘parts of the fuel injection pumps for diesel engines’ shall fall under entry 8413 91 90 as ‘Other’ because it is not classifiable under any other subheadings.
f. The applicant submits that the product proposed to be supplied shall undisputedly be covered under Tariff Heading 8413 91 under Section XVI of the Customs Tariff Act, 1975, which deals with ‘Parts of Pumps’ and specific Tariff Item numbers are provided for parts of Reciprocating Pumps, Centrifugal Pumps, Deep well turbine pumps and of other rotary pumps, Hand pumps for handling water. Tariff Heading 8413 91 90 pertains to ‘Other’ subclassification of ‘parts of Pumps”.
g. The applicant states that it is understood that the fuel injection pumps are classifiable under Tariff Heading 8413 30 10, which are not being manufactured by the applicant. The applicant states that he specifically manufactures ‘parts of fuel injection pumps’, not covered in the entry of tariff heading 8413 30 10.
h. Schedule I of the Notification No.1/ 2017 – Integrated Tax (Rate) provides for the list of goods that attract IGST at the rate of 5%. Entry 231 of the Notification reads as below:
