In re Amazon Wholesale India Private Limited (CAAR Delhi)
The Customs Authority of Advance Ruling, Delhi, recently issued a ruling on the classification of the Amazon Echo Device C2H4R9 (referred to as the subject goods). This ruling addresses questions related to the classification of the device, its features, and eligibility for customs duty benefits.
Applicant and Application: The applicant, Amazon Wholesale India Private Limited, sought an advance ruling under section 28-H of the Customs Act, 1962, regarding the classification of the subject goods. The application was registered on 09.03.2023.
Nature of the Subject Goods: The subject goods, Amazon Echo Device C2H4R9, are part of the Echo family of products. These devices are voice command-enabled and perform various functions, including answering questions, playing music, providing news and information, and controlling smart devices. They respond to the wake word “Alexa” and are Wi-Fi and Bluetooth-enabled.
Technical Details: The subject goods are compact, weighing 200 grams, with 512MB of RAM and advanced Bluetooth and Wi-Fi connectivity. They come with a built-in speaker, require the Alexa App for setup, and are powered by MediaTek MT 8519 processor.
Functionality: The devices capture voice commands, transmit them over the internet to Amazon services in the cloud (Alexa Voice Service), where they are processed and interpreted. The response is then sent back to the device for presentation to the user. The subject goods also support voice interactions, music playback, setting alarms, and controlling smart appliances.
Classification Dispute: The applicant argued that the principal function of the subject goods is communication, as they rely on voice commands and internet connectivity. They suggested classification under Sub-heading 85176290 based on Section Note 3 to Section XVI.
Counterargument: The Customs Authority countered that the primary function of the goods is to reproduce sound and act as speakers. They contended that even though the devices have communication capabilities, their principal function remains as speakers, leading to classification under Sub-heading 8518.
Applicability of Notifications: The applicant sought clarification on the applicability of customs duty notifications, including Notification No. 57/2017-Cus and Notification No. 12/2022-Cus.
Ruling: The Customs Authority ruled that the subject goods should be classified under Sub-heading 85182210, consistent with their principal function as smart speakers. They determined that benefits under Notification No. 57/2017-Cus were not applicable due to the classification. Additionally, the exemption under Notification No. 12/2022-Cus was found inapplicable as the subject goods fell under the category of hearable devices.
Conclusion: The Customs Authority’s ruling clarifies the classification of the Amazon Echo Device C2H4R9 as smart speakers under Sub-heading 85182210. It also highlights the inapplicability of certain customs duty benefits due to this classification. This ruling provides valuable insights into the customs classification of similar devices and their eligibility for duty concessions.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, DELHI
M/s Amazon Wholesale India Private Limited, 14th Floor, Unit 1401 to 1421, Block E. International Trade Tower. Nehru Place, New Delhi- 110019, having IEC No. 0513081950 and PAN-AAMCA0671Q (applicant, in short) has filed an application dated 02.03.2023, received in this office on 09.03.2023 seeking advance ruling under section 28-H of the Customs Act. 1962 before the Customs Authority for Advance Rulings. New Delhi (CAAR. New Delhi, in short).The application was accordingly registered under Serial No. 06/2023 dated 09.03.2023.
2. The applicant vide the aforesaid application, has sought ruling on the question of classification of the proposed item of import, Digital Media Receiver, Model No. C2H4R9 (subject goods. in short). Ruling has also been sought on applicability of various notification on import of the subject goods.
3.1 In reply to a question in Form CAAR-I i.e as to whether a similar matter as raised in the question(s) by the applicant has already been decided by the Appellate Tribunal or any court’?. the applicant has stated that. the subject Echo device covered under the present application is ne‘‘ and different from previous Echo devices. therefore. the present application is being filed.
3.2 As per the applicant, they now propose to import Digital Media Receiver having model no. C2H4R9, which is a new Echo family product: the Echo family devices, are voice command devices with multiple functions, including answering questions. playing music, reading news/audio-books, providing traffic. weather and other real-time information and controlling smart devices: the Echo family devices are communication devices in the form of smart speaker with or without display with Alexa Technology built in it: these devices respond to the name “Alexa”, which is commonly known as the ‘wake word’: this ‘wake word’ can be changed by the user to either “Amazon”. “Computer- or “Echo”. Further, the applicant has stated that, the subject Echo deN ice is a hands-free Alexa-enabled device that comes with an inbuilt speaker: the subject goods are compatible with Fire OS, Android, and iOS devices and are accessible via web browser i.e. Alexa App: the subject goods support Wi-fi and Bluetooth connectivity: with the help of the subject goods, a user can perform various functions such as voice interaction, music playback, making to-do lists. setting alarms, streaming podcasts, playing audio books, providing weather, traffic update. other real-time information and controlling smart devices.
3.3 The applicant has also submitted technical details of the subject goods as under :-
