In re Sunchirin Autoparts India Pvt Ltd. (GST AAR Uttar Pradesh)
Classification of Air Conditioner House Assembly (suction / discharge) used as part of Air Conditioner Compressor and Applicable tax rate for the classification.
The product ‘Air Conditioner Hose Assembly’ as described in the application will merit classification under Chapter Heading 4009 of the GST Tariff and would be chargeable to GST at applicable rate under the said tariff entry, presently read with Notification No 1/2017-Central Tax (Rate) dated 28th June, 2017 (Sl. No. 119 of Schedule-III).
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, UTTAR PRADESH
Sub:- GST ACT, 2017 – Advance Ruling U/s 98 – liability to tax under GST Act in respect to application dated 27.06.2019 of M/s Sunchirin Auto Parts India Private Limited, Plot No. 347G, Sector Udyog Kendra Extension-II, Ecotech-3, Greater Noida Industrial Area, Gautam. Budh Nagar, Uttar Pradesh- 201 306- Order- Reg.
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1) M/s Sunchirin Auto Parts India Private Limited, Plot No. 347G, Sector Udyog Kendra Extension-II, Ecotech-3, Greater Noida Industrial Area, Gautam Budh Nagar, Uttar Pradesh (here in after called the applicant) is a registered assessee under GST having GSTIN: 09AAICS8959D1ZS.
2) The applicant is a limited company engaged in manufacturing of Air Conditioner Hose Assembly used for transfer of gas from the air conditioner evaporator core to the air conditioner compressor and then transfer of gas from the air conditioner compressor to the air conditioner condenser. The product is used as a part of gas compressor in Heat Ventilation and Air Conditioning System (HVAC). It can neither change the temperature and humidity nor can regulate the same on its own.
3). As per applicant, the major inputs/raw materials required for manufacturing of this product, are;
i. Aluminum Tube
ii. Rubber Hose
iii. Rubber 0-Ring
iv. Nylon Band
v. Machine Screw
vi. Steel 86 Iron Clamp
vii. Rubber Bush
viii. Rubber Insulator
4). The applicant submitted that prior to GST regime the product was classified under the chapter 4009 of the Central Excise Act, 1985, that is for tube, pipes and the hose of vulcanized rubber other than hard rubber with or without their fittings (i.e. joints, elbow, flanges). However, now they submitted that the product is used as part of gas compressor in Heat Ventilation and Air Conditioning system (HVAC) and be classified under CSH 84149011 which is for parts of air or vacuum pumps and compressor, of gas compressors of a kind used in refrigerating and air conditioning appliance and machinery.
5). Accordingly, following questions have been posted by the applicant, in his application dated 27.06.2019 (application completed in all aspect received by the Authority on 27.09.2019), before the Authority: –
i. Classification of Air Conditioner Hose Assembly (suction discharge) used as part of Air Conditioner Compressor.
ii. Applicable tax rate for the classification.
6) The application for advance ruling was forwarded to the Jurisdictional GST Officer to offer his comments/views/verification report in the matter, which was received in this office vide letter dated 29.11.2019, wherein briefly describing the term Air Conditioner Hose assembly it was reported that Air conditioner Hose assembly.
7) The applicant was granted a personal hearing on 11.12.2019. Shri Varun Khurana, CA, Authorized representatives of the applicant, appeared for hearing.
During the personal hearing he reiterated the submissions already made vide advance ruling application and also submitted additional written submissions, gist of which is as under:
i. In the excise regime the company was clearing the finished good under CETSH No 40093200 for Air Conditioning Component parts (the applicant adduce excise return and invoices to vindicate their claim).
ii. The company is currently registered for the supply of following goods:-
a. 84159000 – Air conditioning machines, comprising a motor driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated – Parts.
b. 76081000 – Aluminium tubes and pipe – of aluminium, not alloyed.
c. 76090000 – Aluminium tube or pipe fittings (For example, Couplings, Elbows, Sleeves).
d. 40093200 – Tube, pipes and hoses, of vulcanized rubber other than hard rubber, with or without their fittings (For example, joints, elbows, flanges) Reinforced or otherwise combined only with textile materials: with fittings.
iii. Out of Customer pressure, the company is currently billing under 84159000 – Air conditioning machines, comprising a motor driven fan and elements for changing the temperature and humidity, including those machines in which the humidity cannot be separately regulated Parts.
iv. In reference to the general rules for interpretation of import Tariff Rule 2(a) of Custom Tariff, Act, 1975, the product should be classified in 40093200 with fittings – Reinforced or otherwise combined with other materials. Chapter head 4009 refers to tube, pipes and hoses of vulcanized rubber other than hard rubber, with or without their fittings for example, joints, Elbows, Flanges in Schedule III.
v. Further as per the Notification No 1/2017-Central Tax (Rate) dated 28th June, 2017 Chapter Heading 4009 mentioned at S. No.119 of Schedule III would attract GST rate of 9% as CGST.
DISCUSSION AND FINDING
8) At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the UPGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / UPGST Act would be mentioned as being under the `CGST Act’ 2017.
9) We have gone through the submissions made by the applicant and have examined the explanation submitted by them. At the outset, we find that the issue raised in the application is squarely covered under Section 97(2)(a) of the CGST Act 2017, being a matter related to classification of any goods or service or both. We therefore, admit the application for consideration on merits.
10) We observe that the questions sought by the applicant are-
i. Classification of Air Conditioner Hose Assembly (suction discharge) used as part of Air Conditioner Compressor.
ii. Applicable tax rate for the said classification
11) Here, we observe that the Chapter heading 4009 of Custom Tariff Act, 1975 reads as under:-
