In re A Raymond Fasteners India Pvt. Ltd. (GST AAR Maharashtra)
Advance Ruling authority is not allowed to answer the question on classification of imported goods since the same is out of the purview of Sec. 95 of CGST Act.In this case jurisdictional office has raised the issue of classification of imported goods not being covered for the purposes of ruling by this authority, the applicant has further, in their additional submissions contended that that the same products are also supplied locally, out of manufacturing, by them. However they have not supported their new contentions with any material evidence on record. Hence we find the applicant’s said contention is not proper and justifiable.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, MAHARASHTRA
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as CGST Act and MGST Act” respectively ] by M/s A Raymond Fasteners India Pvt. Ltd, the applicant, seeking an advance ruling in respect of the following questions.
A.1 Whether Threaded metal nuts which function same as standard nut, merits classification under the Tariff item 7318 16 00 and not under Tariff item 8708 99 00?
A.2 Whether Plastic rivets not only being capable of being used in the fitment of trims on the body of a motor vehicle but in other industries for similar functionality, merits classification under Tariff item 3926 90 99 and not under Tariff item 8708 99 00?
A.3 Whether Quick Adapter not only capable of being used to connect pipes and tubes in the interior of a motor vehicle, but also for similar functionality in other industries, merit classification under the Tariff item 3917 40 00 and not under Tariff item 8708 99 00?
A.4 Whether Plastic pipe clips merits classification under the Tariff item 3926 90 99 and not under the Tariff item 8708 99 00?
A.5 Whether Brackets and Channels merits classification under Tariff item 8708 99 00 despite being “parts of general use” made of plastic, and not under Chapter 39 of the First Schedule?
A.6 Whether Non-Return Valve merits classification under Tariff item 8481 30 00 as it is capable of being used in the internal liquid lines of various machineries and equipment, and not under Tariff item 8708 99 00?
A.7 Whether Metal U Clips merits classification under the Tariff item 8305 90 20 as it is not only capable of being used in the interior or exterior of a motor vehicle to join panels but in other machineries and equipment, and not under the Tariff entry 8708 99 00?
A.8 Whether Fasteners and Spoilers merits classification under Tariff item 8708 29 00 which pertains to parts and accessories of the body of a motor vehicle and thus provides the more specific description of the Fasteners and Spoilers, in comparison to Tariff entry 8708 99 00, which pertains to the residual entry under Heading 8708?
A.9 Whether Bracket merits classification under Tariff item 8708 99 00 and not under Tariff item 8708 29 00, which pertains to a part or accessory found on the exterior of a motor vehicle.
A.10 Whether the Subject Product merits classification under Tariff item 7220 20 90 despite being capable of being classified under Chapter 87 of the First Schedule, and not under Tariff item 8708 99 00.
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression ‘GST Act’ would mean CGST Act and MGST Act.
02 FACTS AND CONTENTION – AS PER THE APPLICANT
The submissions, verbatim, made by the applicant could be seen thus-
“1. A Raymond Fasteners India Pvt. Ltd. (hereinafter referred to as “the Applicant”) is involved in the developing and manufacturing of various types of fasteners and other accessories for a variety of industries ranging from automotive, trucks, energy sector, agriculture, pharmaceutical sector. Its registered office is in Gat No.259,276/8B,Nighoje-Chakan, Taluka-Khed, Pune -410501.
2. The Applicant has its production plant in Pune (Chakan) and is engaged in the manufacture of, amongst others, industrial clip fasteners and prototyping assembly systems, which are primarily used in automobiles.
3. The procurement structure followed by the Applicant chiefly involves importation of various products (inputs and packaging materials) from various sources/ nations, which are then used in the manufacture and subsequent sale of final products.
4. Some product families are also imported and traded by the Applicant.
5. Products are imported by the Applicant as inputs for manufacturing or as final products for trading (collectively referred to as “the Products”) and are to be classified in terms of the Customs Tariff Act, 1975 (“CTA”) and Notification No. 1/2017 — Integrated Tax (Rate) dated 28th June, 2017 (“Classification Notification for payment of applicable Customs duty and Integrated Goods and Services Tax (“IGST”) which is payable as duties of Customs in terms of the CTA.
6. In this regard, provision which are relevant and may have a bearing for classification of the Products in terms of the CTA and the Classification Notification should be appreciated and understood in the context of these facts and commercial circumstances to enable a considered conclusion under the GST regime and law.
Relevant legal provisions of the Goods and Services Tax
7. In terms of Section 5(1) of the IGST 2017, IGST is to be levied on all inter-State supplies of goods and services, on the value determined under Section 15 of the CGST Act, 2017 (“CGST Act”). Further, Section 5(1) also provides that IGST will be levied on goods & services at such rate, not exceeding forty per cent, as may be notified by the Government on the recommendations of the GST Council.
Scheme,of classification
8. Scheme of classification of goods is provided in the Classification Notification which classifies goods into Chapter, Section, Heading and Groups and also provides description of the goods and supports in determining the nature of goods and rate of GST payable qua the goods classified under each head.
9. It is relevant to note that Explanation (iii) and (iv) of the Classification Notification establishes a link between the Classification Notification and CTA. The relevant part of the Classification Notification is extracted below:
“(iii) “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 (51 of 1975).
(iv) The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may he, apply to the interpretation of this notification.”
10. In terms of the Classification Notification, classification of goods in the GST regime ought to be done in tandem with the CTA, and the rules for interpretation of the First Schedule of the CTA. along with the Section Notes, Chapter Notes and General Explanatory Notes would also be applicable to classification of goods post the introduction of GST.
Relevant legal provisions of the Customs Tariff Act, 1975
11. Section XVII of the First Schedule of the CTA (“First Schedule”) provides for classification of goods which form parts of motor vehicles and the products is question were classified under this section in the pre-GST regime.
