Case Law Details
In re ONYX Components & Systems Pvt Ltd (CAAR Mumbai)
Customs Authority for Advance Rulings (CAAR) in Mumbai recently reviewed an application from ONYX Components & Systems Pvt Ltd regarding the classification of various communication modules. These modules include GSM/GPRS (2G), LTE (4G), NR (5G), NB-IoT (Narrow Band LTE 4G), and GPS Modules. The core of the applicant’s request is to classify these items under Customs Tariff Item (CTI) 85177990, which pertains to “Other” parts of apparatus for transmission or reception of voice, images, or other data.
ONYX Components & Systems Pvt Ltd, an ISO 9001:2015 certified company, imports these cellular and GPS modules for use by Original Equipment Manufacturers (OEMs). The company asserts that these modules are multi-component integrated circuits that enable internet connectivity through cellular networks or provide geolocation data via satellite networks. They emphasized that these modules are not standalone functional units. Instead, they require integration onto a Printed Circuit Board (PCB) with other components like an antenna, SIM card, and a power source to become operational within a larger device. The applicant supported their claim by referencing HSN Explanatory Notes for Heading 8517, which covers apparatus for transmission and reception of data and explicitly includes parts. They argued against classification under more general headings like 8542 (Electronic Integrated Circuits) or as complete apparatus under 85176990, stressing that the modules are integral parts, not independent machines.
The applicant provided detailed arguments, differentiating their modules from those custom-manufactured for specific mobile phones, highlighting their general applicability across various devices like cellular network modems, smart meters, and vehicle tracking systems. They further clarified that cellular modems themselves fall under CTI 8517.62, specifically as “Modems (Modulators-Demodulators),” and that the subject modules are essential, non-standalone parts of these modems. The application also addressed why prior imports do not prevent them from seeking an advance ruling for future consignments, citing amendments to the Customs Act, 1962. The CAAR’s decision on this matter will set a precedent for the customs classification of these types of communication modules.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
ONYX Components & Systems Pvt Ltd. (having IEC No. 0991023323) and hereinafter referred to as ‘the applicant’, in short) filed application (CAAR-1) for advance ruling before the Customs Authority for Advance Rulings, Mumbai (CAAR in short). The said application was received in the secretariat of the CAAR, Mumbai on 28.02.2025 along with enclosures in terms of Section 2811(1) of the Customs Act, 1962 (hereinafter referred to as the ‘Act’ also). The applicant is seeking advance ruling on the issue of classification of GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-IoT Narrow Band LTE 4G) Modules & GPS Modules under CTI 85177990 (Other) of the First Schedule of the Customs Tariff Act, 1975 or otherwise.
2. The Applicant vide their application dated 25.02.2025 has submitted as follows:
2.1 M/s. Onyx Components & Systems Pvt. Ltd. (hereinafter referred to as “the Applicant”), is an ISO 9001:2015 certified company engaged in marketing and sale of electronic components and such goods include QUECTEL’s GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-IoT Narrow Band LTE 4G) Modules & GPS Modules which are to be imported by air cargo mode through Hyderabad airport.
2.2 The applicant is filing the present application to seek advance ruling on classification of GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-IoT (Narrow Band LTE 4G) Modules & GPS Modules (also referred to as subject goods) under First Schedule to the Customs Tariff Act, 1975. These goods are used by OEM’s (Original Equipment Manufacturer) in a variety of appliances or devices for transmission of data in a wired or wireless network. Further, Narrow band IoT (NB-IoT) is a low-power, wide-area network (LPWAN) technology developed to enable a wide range of IoT devices and services. It is a part of the LTE (Long-Term Evolution) family and is standardized by 3GPP (3rd Generation Partnership Project) under Release 13.
2.3 The subject goods also known as cellular modules are one of the multiple components on a Printed Circuit Board (PCB), present in an apparatus or a device, which enables internet connectivity through available cellular networks. One side of a cellular module is connected to an antenna for transmission and reception of data through the cellular network. On the other side, the module is connected to an application processor, a Microcontroller Unit (MCU) which controls the device in which it is present and a valid SIM (Subscriber Identity module) card subscription. The application processor is responsible for all the computing activities on a device and for directing the use of every other component present, such as the cellular module for data communications, whereas the cellular module is the component that is capable of transmission and reception of data by connecting to any available cellular network use of a valid SIM card and an antenna.
2.4 The above said modules become functional only when populated on a PCB, along with other supporting discrete components and connected with a SIM Card, that is integrated with the final product (such as Cellular Network Modems, Smart Meters, Agriculture Internet of Things (loT), Surveying Equipment such as Weather Stations, Vehicle Tracking Systems, etc.).
Applicant’s interpretation of Law/Facts
3.1 The applicant submits that the present application is maintainable as the advance ruling is sought on the question of classification of goods Viz., GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-IoT (Narrow Band LTE 4G) Modules & GPS Modules under HSN Code/Tariff Item 8517 7990 of the First Schedule to the Customs Tariff Act, 1975.
3.2 The applicant states that the question of classification of such goods has not been already raised and pending or decided by any officer of Customs, Appellate Tribunal or any Court and this application for an advance ruling as per Section 28H of the Customs Act, 1962 on the question of classification, is thus maintainable and admissible by the Hon’ble Authority for Advance Ruling, under the provisions of the Customs Act.
3.3 The applicant submitted that the subject goods are ‘GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-loT ( Narrow Band LTE 4G) Modules and GPS Modules’ which are in the nature of Multi-Component Integrated Circuits and are capable of providing wireless cellular internet connectivity or communication within the respective GSM, GPRS (2G), LTE(4G), NR (5G) Modules, NB-IoT (Narrow Band LTE 4G) Modules and GPS Networks that the device/ apparatus, in which the module is present in, is connected to. It may be noted that the said goods cannot function independently without other components of the device/ apparatus, to which the module would be connected to, for usage such as antennas, SIM card holder and a power source.
3.4 It is submitted in this regard that the subject goods are parts of devices or apparatus to which they are connected for the purpose of obtaining internet connectivity by utilizing any cellular network such as GSM, GPRS (2G), LTE(4G), NR (5G) Modules, NB-IoT (Narrow Band LTE 4G) Modules or for the purpose of receiving geolocation and time specific data by utilizing a satellite network such as GPS. It is necessary that a power source such as a battery along with an antenna is integrated in the apparatus/device to which the ‘GSM/GPRS (2G) Mods LTE (4G) Modules, NR (5G) Modules, NB-IoT (Narrow Band LTE 4G) Modules and GPS Modules are connected or built Into. Most devices/apparatuses, in which the subject goods can be used for internet connectivity, necessarily require a separate SIM (Subscriber Identity Module) slot, while some devices / apparatuses could utilize eSIM for authenticating purposes.
3.5 It is submitted that every cellular mobile phone or wrist wearable device is equipped with a cellular module that is similar to the subject goods. It is important to note that even though the nature of the modules used in cellular mobile phones or smartwatches and the nature of the subject goods are nearly similar, they are not one and the same and cannot be interchangeably used or substituted. This is because cellular modules used in mobile phones are exclusively custom manufactured in respect of its size, shape and dimensions, as such exclusively customized module can only be soldered or embedded to the Printed Circuit Board (PCB) of the respective mobile phone to be sold along with the entice device. On the contrary, the subject goods are designed for use in a variety of devices / apparatuses or appliances which do not require customization or rigid requirements in respect of size, shape and dimensions.
3.6 As per HSN Explanatory Notes to Heading 8517, the said Heading covers apparatus for the transmission of receptions of speech or other sounds, Images or other data between two points by variation of an electrical current or optical wave flowing in a wired network or by electro-magnetic waves in a wireless network. It is to be noted that the subject or modules are parts of devices which permit the transmission or reception of speech or other sounds, Images or other data by electro-magnetic waves (i.e. cellular networks) in a wireless network.
3.7 Further, as per HSN Explanatory Notes to Heading 8517, the goods covered under Heading 8517 have been divided into three categories –
I. Telephone sets, including telephones for cellular networks or for other wireless networks
II. Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network)
III. Parts
3.8 Further, as per HSN Explanatory Notes to Heading 8517, the above-mentioned Category II has further been divided into the following groups
(A) Base station
(B) Entry-phone systems;
(C) Videophones;
(D) Apparatus for telegraphic communication other than facsimile machines of Heading 8443
(E) Telephonic or Telegraphic Switching Apparatus:
(F) Transmitting and receiving apparatus for radio-telephony and radio-telegraphy, and
(G) (Other communication apparatus
3.9 Furthermore, as per Explanatory Notes of Heading 8517, the aforesaid Group (G) of Category II which deals with “other communication apparatus” Includes-
“This group includes apparatus which allows for the connection to a wired or wireless communication network or the transmission or reception of speech or other sounds, images or other data within such a network.
Communication networks include, inter alia, carrier-current line systems, digital-line systems and combinations thereof. They may be configured, for example, as public switched telephone networks, Local Area Networks (LAN), Metropolitan Area Networks (MAN) and Wide Area Networks (WAN), whether proprietary or open architecture.
This group includes:
(1) Network interface cards (e.g. Ethernet interface cards).
(2) Modems (combined modulators- demodulators),
(3) Routers, bridges hubs, repeaters and channel to channel adaptors.
(4) Multiplexers and related line equipment (e.g. transmitters, receivers or electro-optical converters)
(5) Codecs (data compressors/decompressors) which have the capability of transmission and reception of digital information.
(5) Pulse to tone converters which convert pulse dialled signals to tone signals”.
3.10 It can be observed that in the above-mentioned Explanatory Notes, modems (combined modulators-demodulators) and other devices or apparatuses that would be utilized for the reception and transmission of data in the form of sound, visual text, etc., have been included under Heading 8517. The GSM, GPRS (2G) LTE (4G), NRG) Modules, NB-IoT (Narrow Band LTE 4G) Modules and GPS modules are essential parts of such modems (i.e., cellular modems) and of any other apparatus /device which utilizes cellular/ satellite networks for transmission of different forms of data, as mentioned in the above stated explanatory notes. Without the subject goods (i.e., GSM, GPRS (2G), LTE(4G), NR (BG) Module NB-IoT (Narrow Band LTE 4G) Modules and GPS modules) which are sought to be imported by the applicant, cellular modems that utilize cellular networks for connectivity, would be non-functional. Thus, the subject goods are parts of such apparatuses/devices i.e., cellular modems) covered under Heading 8517.
3.11 For the determination of the appropriate Heading, under whose description the subject goods warrant classification, a detailed description of subject goods, in relation to a single device/ apparatus (E.g. Electronic Data Capture (EDC)), in which it could be utilized as a component or part, has been provided below.
a) GSM, GPRS (2G), LTE (4G), NR (5G) Modules, NB-loT (Narrow Band LTE 4G) Modules and GPS Modules are Multi-component Integrated Circuits present in Cellular modems that are capable of wireless communication within the respective GSM, GPRS (2G), LTE(4G), NR ( SG) Modules, NB-IoT (Narrow Band LTE 4G) Modules and GPS Network to which the main device/apparatus is connected to. Such Modules in combination with several hardware would constitute a device that can access the internet through available cellular networks.
b) GSM, GPRS (2G), LTE(4G), NR (5G), NB-IoT (Narrow Band LTE 4G) and GPS Cellular Modems are devices that allow internet connectivity by modulating and demodulating the signals from the above-said GSM/GPRS/LTE/NR/ NB-IoT/ GPS modules and also has several other components. A GSM Cellular Modem generally consists of a GSM/GPRS/LTE/NR/NB-IoT) GPS Module along with few other components such as a SIM Card, an antenna, a device to modulate and demodulate the signals and power supply.
c) An apparatus/ device, like a Electronic Data Capture (EDC) machine for example, is a complete device/apparatus that has a GSM/GPRS (2G) LTE(4G)/NR (5G) Modles/ NB-IoT (Narrow Band LTE 4G GPS cellular Module, a GSM GPRS (2G)/ LTE(4G)/ NR (5G) Modules/NB-IoT (Narrow Band LTE 4G / GPS Cellular Modem (could even be integrated) and other components like power source, processor, antenna, screen, keypad, speakers, microphone etc. It can electronically capture customer payment card details, allowing merchants to accept credit and debit card transactions through a cellular network connection established by use of the cellular module present in it.
3.12 Based on the above, it can be inferred that the subject goods are used as parts or components of apparatus/devices which can provide cellular/ satellite network connectivity and also such subject goods are not capable of providing such internet connectivity in their imported condition and are to be assembled with other components to make a complete apparatus or device that can provide cellular network connectivity. Such assembled apparatus /device is classifiable under Heading 8517 and the same in unassembled form would render such apparatus device specific parts, classifiable under Tariff hem 8517 7990 and not as ‘other complete machines or apparatus under Tariff Item 8517 6990.
3.13 Based on various dictionary definitions, the term ‘apparatus’ means machine or device used for performing a specific purpose. Further, the term ‘machine’ means a combination of parts which are in inanimate state to do a particular work or to perform a particular function by itself and the term ‘Parts’ means an element or compound or something which will not be useful by itself and without which a machine will not function.
3.14 The applicant wishes to refer to the decision of the Hon’ble CESTAT in Commissioner of Customs, Bangalore v. Modicom Network put. Ltd., 2005 (185) E.L.T. 333 (TrL Bang) wherein it was held that modules (Main Switching Centre Hardware Upgrades) imported are not apparatus and are only parts as they do not have any independent function on their own and they cannot be dis-assembled and further, they are also inserted as essential parts for internet connectivity utilizing cellular and GPS networks.
3.15 In view of the above-mentioned, it can be said that the subject goods, GSM/GPRS (2G)/ LTE(4G)/ NR(5G)/ NB-IoT (Narrow Band LTE 4G) and GPS Modules, that are sought to be imported by the applicant are only components or parts of apparatus or devices attracting classification under Heading 8517. The subject goods cannot function on a stand-alone basis and they must be necessarily populated onto a PCB with other essential components (power source, antenna, display, SIM slot etc…), so as to make the main apparatus or machine functional. While a product is generally understood as an independent item, a part of the product is not.
3.16 It is further submitted in this regard that Tariff Item 8517 6990 is a residuary entry for machines or goods that are classifiable in consonance with the description to Sub-heading 8517 69, when specific entries under said Sub-heading do not describe or cover such apparatus or machines. It must be noted that even though said Tariff Item is a residual entry, the same does not include parts and accessories of goods that are covered under Sub-heading 8517 69. Thus, the subject goods, being parts and not complete machines capable of Independent functioning, cannot be classified under 8517 6990.
3.17 It is submitted, in view of the above, that the subject goods, being parts and accessories of apparatus or machines described under Heading 8517, are classifiable under Sub-heading 8517 79, which specifically covers goods that are parts of apparatus described under Heading 8517. Further, in respect of the entries under Sub-heading 8517 79, the subject goods cannot be classified under Tariff Item 85177910 as GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-IoT (Narrow Band LTE 4G) Modules & GPS Modules are not parts or accessories in the nature of circuit boards whether populated, printed or stuffed. Thus, the subject goods are rightly classifiable under Tariff Item 8517 7990, which is the residual entry for parts of apparatus that are covered under other entries of sub heading 851779.
3.18 The applicant submits that description to Heading 8517 excludes transmission or reception apparatus of heading 8443, 8525, 8527 or 8528. It is submitted that the subject goods neither fit in the description under any of the said heading that are excluded nor can the subject goods be used as parts in any of the goods classifiable under said excluded heading and the same has been elucidated in the following submissions.
3.19 In this regard, it is submitted that the description to Heading 8443 provides for Inclusion of printing machinery that utilize plates, cylinders, and other printing components of Heading 8442 and includes copying machines, facsimile machines, and their accessories. It is submitted that the goods covered under Heading 8443 are printing machines which do not require internet connectivity, much less cellular Internet connectivity, as such printing machines would only be connected to a local area network of other computer systems for receiving data which needs to be printed. Further, the subject goods being cellular modules cannot be used as parts or accessories in any of the transmission or reception apparatuses utilized in such local area networks. Thus, the subject goods are not transmission or reception apparatus of heading 8443.
3.20 The applicant submits that the description to Heading 8525 provides for inclusion of transmission apparatus used for radio broadcasting or television, whether incorporating reception apparatus or sound recording or reproducing apparatus and includes television cameras, digital cameras and video camera recorders. It can be clearly observed that the goods covered under Heading 8525 are apparatuses used for the transmission or reception of radio-broadcasting or sound apparatus and could also be used in reproduction of both. Further such television, digital and video cameras do not require cellular Internet connectivity and also the subject goods, cellular modules cannot be used as transmission or reception devices in any of the said machines. It is pertinent to note that cellular internet connectivity and radio-broadcasting are entirely different from one another and the apparatus utilized by one another are entirely different and cannot be interchangeably used. Thus, the subject goods are not transmission or reception apparatus of heading 8525.
3.21 The applicant further submits that the description to Heading 8527 provides for reception apparatus used for radio-broadcasting, whether combined, in the same housing, with sound recording or reproducing apparatus or a clock. From plain reading of the description, it can be observed that the primary characteristic of the goods covered under the said Heading are radio-broadcasting apparatuses, which may or may not be combined with other sound recording or reproducing apparatus and that such transmission or reception apparatus for radio broadcasting do not require any cellular internet or GPS connectivity modules or components for functioning. Thus, the subject goods are not transmission or reception apparatus of heading 8527.
3.22 It is further submitted in this regard that the description to Heading 8528 provides for monitors and projectors without reception apparatus and Includes reception apparatuses for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus. From plain reading of the above description, it can be inferred that modules are neither monitors and projectors nor can the subject goods be used as parts of such monitors and projectors. Further, such monitors and projector, that are covered under Heading 8528, incorporating receivers or sound of video recording or reproducing apparatus do not utilize or require cellular internet connectivity or contain them as parts or accessories. Thus, the subject goods are not transmission or reception apparatus of beading 8528.
3.23 In view of the above, the applicant submits that the subject goods are not transmission or reception apparatus of heading 8443, 8525, 8527 or 8328 but they are rather parts of apparatus for transmission or reception of voice, images or other data for communication in a wireless cellular or GPS network and the same is in consonance with the description for classification under heading 8517 and under Tariff Item 8517 7990 as per the Customs Tariff Act, 1975.
3.24 The applicant submits that all the subject goods are classifiable under tariff item 8517 79 90, which are neither parts of mobile phones nor inputs or sub parts for use in manufacture of said parts of mobile phones.
The goods are not classifiable under Heading 8542
3.25 The applicant submits that as per Rule 3(a) of the General Rules of Interpretation (GRI) the heading which provides the most specific description shall be preferred to a heading with a more general description. This means that compared to the Heading 8542 which broadly covers the goods by description or a generic name like “Electronic Integrated Circuits” a specific description like “other apparatus for the transmission or reception of voice, images or other date including apparatus in a wired or wireless network” under Heading 8517 should be preferred as the subject goods involved in this application are Multi Component Integrated Circuits that are exclusively used / capable of use, only in apparatuses/devices which are meant for transmission of data.
3.26 In this regard, it has to be understood that Multi Component Integrated Circuits (MCO), is a generic name given to all Integrated Circuits (IC) which have various integrated components/chipsets and the nature or capability of such integrated chipsets and circuits determine the nature of that MCO, In the present case, the GSM, GPRS (2G), LTE (4G), NR (5G) Modules, NB-IoT ( Narrow Band LTE 4G Modules and GPS modules are MCO’s which are equipped with specific chipsets to provide cellular/ satellite (GPS) Internet connectivity in a apparatus or device, when coupled with other essential components such as antenna, SIM card and other User Interface (UT) components such as a display. Thus, classification under Heading 8517, which has a specific description the subject goods should be preferred in comparison to the generic description under Heading 8342, which is inclusive of chips that can be used in several devices to perform several functions unlike the subject goods that are used exclusively in devices or apparatuses that provide wireless internet connectivity for the transfer of various forms of data.
3.27 As per Rule 3(c), when goods cannot be classified by reference to Rule 3(a) or Rule 3(b), they shall be classified under the Heading which occurs last in numerical order among those which equally merit consideration. The goods under discussion in this opinion are not covered under two or more headings which are equally important.
3.28 Rule 4 states that goods which cannot be classified in accordance with the any of the preceding rules shall be classified under the Heading appropriate to the goods to which they are most akin. GSM, GPRS (2G), LTE (4G), NR (5G) Modules, NB-IoT (Narrow Band LTE 4G) Modules and GPS modules are integral parts or components of modems, vehicle tracking devices, Internet of Things devices (loT), Wireless cellular network devices, ATM machines, Electronic Data Capture (EDC) machines, modems etc, and are essentially used in all devices/apparatuses that utilize cellular networks such as GSM, GPRS (2G), LTF (4G), NR (5G) NB-IoT (Narrow Band LTE 4G) or satellite networks (GPS) to operate and enab transmission of voice, images and other forms of data through such networks. Thus, as per Rule 4 of GRI, goods in Heading 8517 are of similar description which is inclusive of devices and parts in which the subject goods, GSM, GPRS (2G), LTE4G), NR (3G), NB-IoT (Narrow Band LTE 4G) and GPS modules are used.
3.29 As per HSN Explanatory Notes to Heading 8517, the said Heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electro-magnetic waves in a wireless network. It is to be noted that the modules are parts of devices which permit the transmission or reception of speech or other sounds, images or other data by electro-magnetic waves in a wireless cellular network such as such as GSM, GPRS, LTE, NR, NB-IoT or in a wireless satellite network such as GPS.
3.30 In view of the above stated, the applicant submits that the subject goods are not classifiable under Heading 8542 of the Customs Tariff Act, 1975.
4. Additional Submissions
4.1 This office, vide email dated 11.06.2025, sought clarification on the following points: (a) an explanation of how the cellular modem is classifiable under CTH 8517, including its functionality and technical specifications, and (b) clarification on how the subject goods (cellular module) qualify as parts of the cellular modem, along with relevant technical details and product catalogues. In response, the applicant, vide email dated 16.06.2025, submitted the following information:
4.1.2 On the question of how the cellular modem is classifiable under CTH 8517 (along with its functionality and technical details), it is submitted that —
> Cellular modem is a hardware device designed to enable data connectivity through a cellular (wireless) network, such as GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-IoT (Narrow Band LTE 4G) Modules, and GPS Modules. The modem connects to a mobile telecommunications network using a Subscriber Identity Module (SIM) card, and communicates with digital devices (e.g., Modems, Routers, Agri-IoT terminals, Surveying Equipment such as Weather Stations, Vehicle Tracking Systems, Smart Meters, POS Terminals etc.) to transmit and receive data. Unlike conventional modems using wired 2 broadband connections, cellular modems utilize radio signals and base station protocols to provide interne or private network access over a wide geographical range, making them critical for remote or mobile applications.
> CTH 8517 of the First Schedule to the Customs Tariff Act, 1975 corresponds to: “Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network…”
> As per HSN Explanatory Notes to Heading 8517, the said Heading covers — apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electromagnetic waves in a wireless network The signal may be analogue or digital. The networks, which may be interconnected, include telephony, telegraphy, radio-telephony, radio-telegraphy, local and wide area networks.
> It can be observed that the Explanatory Notes to heading 8517 have included Modems (combined modulators-demodulators) and other devices or apparatuses that would be utilized for the reception and transmission of data in the form of sound, visual, text, etc., under Heading 8517.
> Further, Subheading 8517.62 specifically covers “Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus.” Also the CTI 8517.62.30 explicitly mentions “Modems (Modulators-Demodulators)”.
> Therefore, cellular modem squarely falls within the scope of subheading 8517.62, since it is a standalone machine that performs the functions of receiving and converting radio signals from the cellular network into digital data usable by a host device, and vice versa. Its sole function is data communication, and it neither serves as a telephone nor as a terminal by itself.
4.1.3 On the question of how the subject goods (cellular module) are parts of the cellular modem, it is submitted that —
> Cellular module is a compact integrated circuit board containing the cellular communication chipset, baseband processor, transceiver, and power management unit, typically manufactured in LCC, LGA, LCC+LGA, M.2 & Mini PCIe form factors.
> It is embedded inside the modem housing and performs the following essential functions:
-
-
- Establishes connectivity with the cellular network using predefined frequency bands.
- Manages radio protocol stack layers, including authentication, signalling, and data channel control.
- Converts digital data from the host system into modulated RF signals, and demodulates incoming signals back into usable data.
- This module is indispensable to the functioning of the cellular modem. Without the module, the modem device lacks the core cellular transmission capability.
-
> The cellular module is specifically designed and marketed for use in cellular modems and gateways. It has no standalone utility and cannot be used as an independent apparatus. It is typically soldered onto or slotted into the main PCB of the modem.
> The cellular module is an essential parts of modems and of any other apparatus / device which utilizes cellular/ satellite networks for transmission of different forms of data. Without such modules, devices such as modem that utilize cellular networks would be non-functional. Thus, the imported goods are parts of such apparatuses covered under Heading 8517.
> Based on the above, it can be inferred that the subject goods are used as parts or components of apparatus/ devices which can provide cellular/ satellite network connectivity which are not capable of providing such internet connectivity in their imported condition and are to be assembled with other components to make a complete apparatus or device that can function utilizing such cellular or satellite network.
> In view of the above-mentioned, it can be clearly observed that the cellular modules [GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-1oT (Narrow Band LTE 4G) Modules, and GPS Modules] are only components or parts of apparatus or devices that are capable of cellular internet connectivity and the same are to classified as parts of such apparatuses under the tariff item 8517 79 90, of description “Parts of other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network)”.
>The tariff item viewed as applicable by the Customs i.e., 8517 69 90 is under “Other apparatus” and “Machines” and the imported goods are neither apparatus nor machines as explained above since they cannot function on standalone basis and they need to be populated in PCB with other components so as to make the main apparatus or machine functional. Equating the present goods which are parts with the main apparatus or device or product itself is a result of lack of understanding of the goods imported. While a product is generally understood as an independent item, a part of the product is not.
4.2 Further, this office, vide email dated 13.06.2025, requested to clarify as to why the ongoing regular imports were not disclosed in the Application for Advance Ruling. In response, the applicant submitted that, following the amendments made in 2018, an advance ruling may be sought prior to the importation of goods and is no longer limited to cases involving the setting up of a business activity, as was previously the case. They clarified that, irrespective of past imports, an advance ruling can be sought for proposed future imports of the same goods. Therefore, the existence of prior imports does not preclude the applicant from seeking an advance ruling for future consignments.
Port of Import and reply from concerned jurisdictional Commissionerate
5.1 The applicant in their CAAR-1 indicated that they intend to import the subject goods i.e.
GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-IoT (Narrow Band LTE 4G) Modules & GPS Modules at the jurisdiction of Office of the Commissioner of Customs, Air Cargo Complex, Hyderabad. The application was forwarded to the Office of the Commissioner of Customs, Air Cargo Complex, Hyderabad for their comments on 20.03.2025.
5.2 The concerned Commissionerate vide their letter dated 01.05.25 submitted as follows:
> The applicant is a regular importer of items GSM/GPRS & GPS Module under CTI 85177990 through Air Cargo Complex, Shamshabad. As per records, no case has been booked, and no investigation is pending into the subject matters.
> As per HSN Explanatory Notes to Heading 8517, the said Heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electromagnetic waves in a wireless network. It is to be noted that the subject modules are parts of devices which permit the transmission or reception of speech or other sounds, images or other data by electro magnetic waves (i.e., cellular networks) in a wireless network.
> Based on HSN Explanatory Notes to CTH 8517, it appears that the subject gods are used as part or component of apparatus/devices which can provide cellular/satellite network connectivity and also such subject goods are not capable of providing such internet connectivity in their imported condition and are to be assembled with other components to make a complete apparatus or device that can provide cellular network connectivity.
> The details submitted by the applicant in their application have been examined, and it is opined that the items are classifiable under CTH 8517.
Details of Hearing
6.1 A hearing was held on 16.06.2025 at 03.00 PM. Shri Jayant Atrey, authorized representative on
behalf of the applicant appeared for the hearing and reiterated the contention submitted with the application. He submitted that the subject goods i.e. GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-loT Narrow Band LTE 4G) Modules & GPS Modules to be used by OEM in a variety of appliances for transmission of data in a wired or wireless network and merit classification under CTH 8517, more particularly under CTI 85177990 as parts.
Nobody appeared on behalf of the Department for hearing.
Discussion and findings
7.1 I have considered all the materials placed before me in respect of the subject goods. I have gone
through the submissions made by the applicant during the personal hearing and comments received from the concerned Commissionerate. I proceed to pronounce a ruling on the basis of information available on record as well as existing legal framework.
7.2 At the outset, I find that the issue raised in the question in the Form CAAR-1 is squarely covered
under Section 2811(2) of the Customs Act, 1962, being a matter related to classification of goods under the provisions of this Act.
7.3 Before deciding the issue, let me deliberate on the legal framework prescribed in Customs Tariff Act, 1975, Chapter/ Section notes along with HSN explanatory notes. As per Rule 1 of GRI, the titles of Sections, Chapters and sub-Chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes.
7.3.1 The Applicant has submitted that the products under consideration—namely GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-IoT (Narrow Band LTE 4G) Modules, and GPS Modules, are used by Original Equipment Manufacturers (OEMs) in a wide range of appliances and devices for the purpose of data transmission over wired or wireless networks. These products, commonly referred to as cellular modules, are among the several components mounted on a Printed Circuit Board (PCB) within a device or apparatus. They enable intemet connectivity through available cellular networks. Typically, one side of a cellular module is connected to an antenna to facilitate the transmission and reception of data via cellular networks. The other side interfaces with an application processor or a Microcontroller Unit (MCU) that governs the overall functioning of the host device, along with a valid SIM (Subscriber Identity Module) card. The application processor is responsible for executing computing functions within the device and managing its various components—including the cellular module—for data communication. The cellular module, in turn, is the specific component that establishes connectivity with a cellular network using the antenna and a valid SIM card. These modules become operational only when integrated on a PCB, together with other supporting discrete components, and connected to a SIM card. They are then embedded into the final products such as cellular network modems, smart meters, agricultural IoT devices, surveying instruments (e.g., weather stations), vehicle tracking systems, and other similar equipment.
Given that the subject goods serve as integral parts of apparatus or machines falling under Heading 8517, and are not capable of functioning independently in their imported condition, they are appropriately classifiable under Sub-heading 8517 79 90, which specifically covers parts of apparatus described under Heading 8517.
7.3.2 Based on the submissions made by the applicant, it is understood that the goods under consideration, referred to as cellular module, is a compact integrated circuit board containing the cellular communication chipset, baseband processor, transceiver, and power management unit that forms one of the several components of an apparatus known as a cellular modem. This cellular modem is the primary device or apparatus responsible for enabling cellular connectivity in a wide range of appliances and devices, facilitating data transmission over wired or wireless networks.
Before proceeding to examine the classification of these modules, it is essential to first determine the appropriate classification of the apparatus (i.e., the cellular modem) of which the subject goods form a part or component.
7.3.3 A cellular modem consists of a cellular module, a Microcontroller Unit (MCU), an application processor, a SIM (Subscriber Identity Module) card, and an antenna. These components are typically mounted on a Printed Circuit Board (PCB) in embedded systems or devices such as smartphones, IoT devices, or cellular routers.
A cellular modem connects to a cellular network by first reading the identity information stored in the SIM card, such as the International Mobile Subscriber Identity (IMSI) and authentication keys, during device initialization. It then scans for nearby cellular towers and selects the most suitable network based on signal strength and SIM configuration. The modem initiates a network registration request, and the network responds with an authentication challenge. Upon successful authentication, the modem registers with the network and establishes a connection. For internet access, the modem initiates a data session, during which the network assigns an IP address, enabling data transmission. Throughout its operation, the modem manages voice, messaging, and data services by working in coordination with the RF transceiver and antenna to maintain a stable connection and perform seamless handovers between cells when the device is in motion.
Thus, a cellular modem is an apparatus that enables connection to a wireless communication network and facilitates the transmission and reception of speech, sound, images, or other data over such networks.
7.3.4 I note that the Chapter Tariff Heading 8517 covers “Telephone sets, including telephones, for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525,8527 or 8528″. The relevant portion of CTH 8517 is reproduced below for ease of reference:
| Subheading/ Tariff Item | Dash | Description |
|
|
– | Telephone sets, including smartphones and other telephones for cellular networks or for other wireless networks: |
| 8517 11 | — | Line telephone sets with cordless handsets: |
| 8517 11 10 | — | Push button type |
| 8517 11 90 | — | Other |
| 8517 13 00 | — | Smartphones |
| 8517 14 00 | — | Other telephones for cellular networks or for other wireless networks |
| 8517 18 | — | Other |
| 8517 18 10 | — | Push button type |
| 8517 18 90 | Other | |
|
|
– | Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network): |
| 8517 61 00 | — | Base stations |
| 8517 62 | — | Machines for the reception, conversion and transmission on regeneration of voice, images or other data, including switching and routing apparatus |
| 8517 6210 | — | PLCC equipment |
| 8517 6220 | — | Voice frequency telegraphy |
| 8517 6230 | — | Modems (modulators-demodulators) for xDSL based Wireline
Telephony |
| 8517 6250 | — | Digital loop carrier system (DLC) |
| 8517 6260 | — | Synchronous digital hierarchy system (SDH) |
| 8517 6270 | — | Multiplexes, statistical multiplexers for PDH based |
| 8517 6290 | — | Other |
| 8517 69 | — | Other: |
| 8517 69 10 | — | ISDN System |
| 8517 69 20 | — | ISDN terminal adaptor |
| 8517 69 40 | — | X 25 Pads |
| 8517 69 60 | — | Set top boxes for gaining access to intemet for Wireline Telephony |
| 8517 69 70 | — | Attachments for telephones |
| 8517 69 90 | — | Other |
|
|
– | Parts: |
| 8517 71 00 | — | Aerials and aerial reflectors of all kinds; parts suitable for use therewith |
| 8517 79 | — | Other |
| 8517 79 10 | — | Populated, loaded or stuffed printed circuit boards |
| 8517 79 90 | — | Other |
7.3.5 The HSN Explanatory Notes to Heading 85.17 provide that the Heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electro-magnetic waves in a wireless network. The heading 8517 as per the First Schedule to the Customs Tariff Act, 1975, has three single dash (-) entries. Thus, the goods covered under CTH 85.17 (Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525,8527 or 8528) have been divided into the following three categories:
I. Telephone sets, including telephones for cellular networks or for other wireless networks:
II. other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network);
III. Parts
7.3.6 As per HSN, the aforesaid category II has further been divided into the following groups:
(A) Base station;
(B) Entry-phone systems;
(C) Videophones;
(D) Apparatus for telegraphic communication other than facsimile machines of Heading 84.43;
(E) Telephonic or Telegraphic Switching Apparatus;
(F) Transmitting and receiving apparatus for radio-telephony and radio-telegraphy; and
(G) Other communication apparatus.
7.3.7 As per Explanatory Notes, the aforesaid Group G relates to “Other communication apparatus” and is reproduced below:
“This group includes apparatus which allows for the connection to a wired or wireless communication network or the transmission or reception of speech or other sounds, images or other data within such a network
Communication networks include, inter alia, carrier current line systems, digital-line systems and combinations thereof They may be configured, for example, as public switched telephone networks, Local Area Networks (LAN), Metropolitan Area Networks (MAN) and Wide Area Networks (WAN), whether proprietary or open architecture.
This group includes:
(1) Network interface cards (e.g., Ethernet interface cards).
(2) Modem (combined modulators-demodulators).
(3) Routers, bridges hubs, repeaters and channel to channel adaptors.
(4) Multiplexers and related line equipment (e.g., transmitters, receivers or electro-optical converters).
(5) Codecs (data compressors/decompressors) which have the capability of transmission and reception of digital information.
(6) Pulse to tone converters which convert pulse dialed signals to tone signals.”
From the above, it is apparent that Heading 8517.62 covers “Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus.” As per the Explanatory Notes, Group G under this heading pertains to “Other communication apparatus” and includes devices that enable connection to wired or wireless communication networks, or facilitate the transmission and reception of speech, sound, images, or other data within such networks. As discussed above, it is observed that a cellular modem qualifies as such an apparatus, as it enables connection to a wireless cellular network and facilitates the transmission and reception of data, voice, or images over that network. Furthermore, Customs Tariff Item (CTI) 8517.62.30 specifically covers “Modems (Modulators-Demodulators),” and the cellular modem clearly falls within this category. It is a standalone device that performs the essential function of converting radio signals from a cellular network into digital data usable by a host device and vice versa. Its primary and sole function is data communication, bringing it squarely within the scope of subheading 8517 of the First Schedule of the Customs Tariff Act, 1975.
7.3.8 Now, I proceed to examine the classification of cellular modules namely GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-loT (Narrow Band LTE 4G) Modules, and GPS Modules. As per technical submission made by the applicant, image of one of the product under question i.e., GSM/GPRS module is as under:
It is evident that the cellular module is one of the essential components of a cellular modem. A typical cellular modem comprises a cellular module, a Microcontroller Unit (MCU), an application processor, a SIM (Subscriber Identity Module) card, and an antenna. These components are typically mounted on a Printed Circuit Board (PCB) and embedded within systems or devices such as smartphones, loT devices, and cellular routers. As per technical submission made by the applicant, image of one of modem namely, 7SEMI LTE 4G Mini Modem is as under:
The applicant submitted that these modules are parts of the cellular modem or other apparatus device which utilizes cellular/ satellite networks for transmission and reception of data. Therefore, it becomes pertinent to analyze whether the cellular module can be considered as a ‘part of cellular modem and of any other apparatus / device which utilizes cellular/ satellite networks for transmission of different forms of data, attracting classification under CTH 8517.
The term “parts” has not been defined in the HSN Explanatory Notes or the Customs Tariff. Hence, reliance must be made to the Hon’ble Supreme Court’s judgement in the case of CCE, Delhi Vs. Insulation Electrical (P) Ltd, [2008 (224) E.L.T. 512 (S.C.)]. In this case, the Apex Court while relying on various other earlier judgments has defined the term “parts” as “an essential component of the whole without which the whole cannot function”.
A similar judgment has been made in the case of Electrosteel Castings Vs. CCE, [1989 (43) E.L.T. 305 (Tribunal)] which has been maintained by the Hon’ble Supreme Court in [1996 (83) ELT A48 (SC)].
As per Chapter 11 (Definitions) of Foreign Trade Policy (FTP), “Part” means an element of a sub-assembly or assembly not normally useful by itself, and not amenable to further disassembly for maintenance purposes. Apart may be a component, spare or an accessory.
From the above definitions and judicial precedents, it may be concluded that any item which is an integral and essential component of a larger system or apparatus may be considered a “part’ thereof.
Based on the technical data and supporting documentation submitted by the applicant, it is evident that the aforementioned modules are designed for the transmission and reception of data. These modules become functional only when mounted on a PCB along with other supporting discrete components, connected to a SIM card, and integrated into the final product. Such final products may include cellular modems, smart meters, agricultural loT equipment, weather stations, vehicle tracking systems, and other communication devices.
In view of the above definitions, technical specifications, and judicial guidance, it is concluded that the subject goods namely, GSM/GPRS (2G), LTE (4G), NR (5G), NB-IoT (Narrowband LTE 4G), and GPS modules, constitute components or parts of apparatus or devices attracting classification under CTH 8517 of the First Schedule to the Customs Tariff Act, 1975. Accordingly, these goods are covered within the third single dash (-) entry of “parts” under CTH 8517.
7.3.9 It is seen that HS Explanatory Notes to headings 8517 as regards ‘parts’ falling thereon, stipulates that classification of ‘parts’ of machines of heading 8517 are: “Subject to the general provisions regarding the classification of parts (see the General Explanatory Note to Section XVI), parts of the apparatus of this heading are also classified here”
Further, it would also be useful to refer to Note 2 of Section XVI of the Tariff Act, 1975 which provides for rules to be followed while classifying ‘parts of machines’ falling under Chapters 84 and 85. The relevant part of the Section Note 2 is reproduced below:
“2.- Subject to Note 1 to this Section, Note 1 to Chapter 84 and Note I to Chapter 85, parts of machines (not being parts of the articles of heading 84.84, 85.44, 85.45, 85.46 or 85.47) are to be classified according to the following rules:
(a) Parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 84.09, 84.31, 84.48, 84.66, 84.73, 84.87, 85.03, 85.22, 85.29, 85.38 and 85.48) are in all cases to be classified in their respective headings; “
(b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466,8473,8503,8522,8529 or 8538 as appropriate.
[However, parts which are equally suitable for use principally with the goods of headings 851 7 and 8525 to 8528 are to be classified in heading 8517, and parts which are suitable for use solely or principally with the goods of heading 8524 are to be classified in heading 8529] ;
(c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8485 or 8548″.
Note 2 deals with three categories of parts (i) parts which are goods included in any of the heading of Chapter 84 or 85 (ii) other parts suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading and (iii) all other parts.
7.3.10 Upon sequential application of the rules provided in Section Note 2 to Section XVI, it is observed that there is no specific entry under Chapter 84 or Chapter 85 which specifically cover the subject goods namely, GSM/GPRS (2G), LTE (4G), NR (5G), NB-IoT (Narrowband LTE 4G), and GPS modules. Accordingly, these modules are excluded from the purview of Section Note 2 (a).
In light of the above, reference must be made to Section Note 2 (b) which covers other parts which are suitable for use solely or principally with a particular machine. In the present case, the subject goods namely, GSM/GPRS (2G), LTE (4G), NR (5G), NB-IoT (Narrowband LTE 4G), and GPS modules are specifically designed and manufactured for use with cellular modem and other apparatus meant for the transmission and reception of data over cellular networks. Therefore, they are capable of being used solely or principally with such apparatus covered under Heading 8517.
Accordingly, it is pertinent to note that the subject goods satisfy the “sole or principal use” criterion laid down under Section Note 2(b). As such, they are classifiable under Heading 8517 in accordance-with General Interpretative Rule (GIR) 1, read with Section Note 2(b) to Section XVI.
7.3.11 Further, the single dash (-) entry for “Parts” under heading 8517 is divided into the followings entries at the eight-digit level.
| 8517 71 00 | — | Aerials and aerial reflectors of all kinds; parts suitable for use therewith |
| 8517 79 | — | Other |
| 8517 79 10 | — | Populated, loaded or stuffed printed circuit boards |
| 8517 79 90 | — | Other |
From the above, it is evident that the subject goods namely, GSM/GPRS (2G), LTE (4G), NR (5G), NB-IoT (Narrowband LTE 4G), and GPS modules are not covered under any of the specific subheading at the eight-digit level under heading 8517. Consequently, they fall under the residuary entry 8517 79 90, which reads as “Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528- Parts-Other—Other”. Therefore, by virtue of GIRL, Note 2(b) to Section XVI, and Explanatory Notes to Heading 8517, the products in question i.e., GSM/GPRS (2G), LTE (4G), NR (5G), NB-IoT (Narrowband LTE 4G), and GPS modules are classifiable under CTI 85177990 (Other) of the First Schedule of the Customs Tariff Act, 1975.
8. The concerned jurisdictional Commissionerate has also contended that, based on the HSN Explanatory Notes to Heading 8517, the subject goods are used as parts or components of apparatus/devices that provide cellular or satellite network connectivity. It has further been observed that these goods, in their imported condition, are not capable of independently providing such connectivity and must be assembled with other components to form a complete apparatus or device capable of cellular network communication. Accordingly, the Commissionerate has concluded that the subject goods are classifiable under Heading 8517. However, the Commissionerate has not specified the classification at the eight-digit level.
I broadly concur with the view expressed by the concerned jurisdictional Commissionerate. In addition, since the subject goods are in the nature of parts, they are specifically classifiable under Customs Tariff Item (CTI) 8517 79 90 (Parts —Other) of the First Schedule to the Customs Tariff Act, 1975
9. In view of the above facts and circumstances of the case, I reach to conclusion that the products in question namely, GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-IoT Narrow Band LTE 4G) Modules & GPS Modules merit classification under CTH 8517 (Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528-), more specifically under CTI 85177990 (Parts—Other) of the First Schedule of the Custom Tariff Act, 1975.
10. I rule accordingly.
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