In re Parker Hannifin India Pvt. Ltd. (GST AAR Maharashtra)
Whether the CNG Dispenser manufactured and supplied by the Applicant is correctly covered in SL. No. 422, Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28 June 2017 as amended and corresponding notifications issued under integrated GST and State GST Acts?
The product catalog submitted by the applicant of CNG Dispenser clearly indicates that the product is a complete system meant for dispensing CNG and is fitted with hoses, Electronics, tubes & fittings, regulators, valves, nozzles, filters, solenoid and actuators etc. It has been amplified in catalog that “the System is extremely safe, uses low power, dispenses accurately, uses all stainless steel tubes, fittings and connections and has a high resilience to wear and tear”
We find that Chapter Heading 8413 11 of the GST Tariff covers “Pumps for dispensing fuel or lubricants of the type used in filling stations or garages”. The impugned product is designed to dispense fuel, in this case CNG, which are used in filling stations, and acts as a pump which causes CNG, a gas, to move from one place to another. Thus the impugned product can be said to be a type of pump which are used for dispensing fuel and are therefore classifiable under HSN 8413 11 91 of the GST Tariff.
Section XVI of the GST Tariff covers Chapter Heading 84 and 85 of the GST Tariff. Note 1 (m) of the Section Notes states that, articles of Chapter 90 of the GST Tariff are not covered under Section XVI i.e. Chapters 84 and 85 of the GST Tariff. Further primary function of the impugned product is to dispense CNG Fuel and has an inbuilt mechanism to constantly measure and regulate the mass of Gas being transferred to the vehicle.
As per Note 4 of Section XVI of GST Tariff, where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function. In the instant case the product performs function of a pump of type used in filling stations to dispense CNG Fuel, thus merits classification under HSN 8413 11.
Further as per WCO Harmonized Commodity Description and Coding System, Explanatory Notes to Subheadings 8413.11 and 8413.19, “these subheadings cover, for example, pumps for delivering petrol or other motor fuels and lubricants as well as pumps with a measuring device for use in food shops, laboratories and various industrial activities”.
Since we have found that the impugned product is covered under Chapter Heading 8413 11 of the GST Tariff, it is not covered under in SL. No. 422, Schedule III of Notification No. 1/2017-Central Tax (Rate) dated 28 June 2017 as amended as the impugned product cannot be classified under Chapter 90.32 of the GST Tariff.
Read AAAR order- CNG Dispenser merit classification under Chapter Heading 90.32
