In re Yubico AB (CAAR Delhi)
CAAR ruled that rule that the YubiKey (product) manufactured by Yubico AB, is classifiable under HS Code 8471 8000 of the First Schedule to the Customs Tariff Act, 1975 as per the rules and notes under the Customs Tariff, and technical specifications and usage of the product.
FULL TEXT OF ORDER OF CUSTOMS AUTHORITY FOR ADVANCE RULINGS, DELHI
M/s Yubico AB (‘the Applicant) Kungsgatan 44, 2nd floor, I 1 1 35 Stockholm, Sweden is engaged in manufacture of the product which is a hardware authentication security device. It protects against unauthorized access to computers. networks, and online services. The product strengthens the security of access to the device to which it is connected by adding another layer of authentication vide strong hardware-based authentication, in addition to existing passcode.
2. The product works across major operating systems and connects to different devices in following manner: MA3EXGL I S00395830
I. Via USB-A: Certain models of the product are designed with USB-A interface are therefore, meant to be used primarily with computers i.e., laptop and desktop.
II. Via lightning connectors: Certain models are designed with lightning connectors and arc meant to be used primarily with mobile phones and tablets.
III Through near-field communication (‘NF(“) or via USH-C: Certain models of the product arc equipped ith NFC wireless technology. ‘these models can be connected with multiple types of devices including laptops. desktops and mobile phones by touching / tapping with said devices. Further, certain models arc designed with USH-C intertke and are meant to be used with laptops, tablets and mobile phones supporting such interface.
2.1 Once the product is connected to a device, a three-step verification process is carried out i.e., the product manual ‘141)(7, ‘s NOW nibiKey 5 Series Tochnical Manual’ (`the product manual.), for reference to the technical specifications and related information of the product. As per the Applicant’s understanding of the technical specifications and usage of the product, relevant explanatory notes, section notes, chapter notes of the Customs Tariff, the product is classifiable under Tariff Item 8471 8000, that is the question before the Authority. In view of above stated facts and information, the Applicant hereby requests the Authority to provide a Ruling, basis the submissions made hereunder.
3. The Applicant has analyzed the classification of the product under the relevant provisions of the Customs Act. 1962 read with Customs Tariff Act, 1975, relevant section and chapter notes, explanatory notes, and judicial pronouncements. The analysis is given below:
I. Evaluation of Tariff Item 8471 8000 in the context of the product under consideration
The relevant tariff entry in the Customs Tariff has been reproduced below for ease of reference:
