Case Law Details

Case Name : In re Next Education India private limited (GST AAR Telangana)
Appeal Number : TSAAR Order No. 01/2022
Date of Judgement/Order : 17/01/2022
Related Assessment Year :

In re Next Education India private limited (GST AAR Telangana)

The goods sold by the applicant has a Central processing unit (CPU), memory & storage with an onscreen display of output which is based on the input supply by the user. Therefore in view of the notes to Chapter 84 and also the HSN entries under 8471, the goods fall under HSN 8471.

FULL TEXT OF THE ORDER OF AUTHORITY OF ADVANCE RULING, TELANGANA

1. M/s. Next Education India private limited, 8-2-269/A/2/1 to 6, 1st Floor, 3rd Floor, East Wing, Sri Nilaya Cyber Spazio, Road No.2, Banjara Hills, Hyderabad, Telangana, 500034 (36AABCH9484P1ZQ) has filed an application in FORM GST ARA-01 under Section 97(1) of TGST Act, 2017 read with Rule 104 of CGST/TGST Rules.

2. At the outset, it is made clear that the provisions of both the CGST Act and the TGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the TGST Act. Further, for the purposes of this Advance Ruling, the expression ‘GST Act’ would be a common reference to both CGST Act and TGST Act.

CPU, Memory and Storage with onscreen display of output fall under HSN 8471

3. It is observed that the queries raised by the applicant fall within the ambit of Section 97 of the GST ACT. The Applicant enclosed copies of challans as proof of payment of Rs. 5,000/- for SGST and Rs. 5,000/- for CGST towards the fee for Advance Ruling. The Applicant has declared that the questions raised in the application have neither been decided by nor are pending before any authority under any provisions of the GST Act. The application is therefore, admitted.

4. Brief facts of the case:

M/s. Next Education India Private limited is in the business of supplying interactive flat panels with Android combining all functions of processor, monitor, touch input and speaker into a single unit. The applicant claims that the embedded processor of the device runs on android operating system facilitating the processing of programs and arithmetical computations. The device has infrared touch screen which uses LED and light sensor and therefore it is sensitive to finger touch of users. The applicant would like to know the HSN classification of this good. Hence this application.

5. Question raised:

Whether the appropriate HSN classification of the above described Interactive Flat panel with Android would be under the heading 8471?

6. Personal Hearing:

The Authorised representatives of the unit namely Savith V Gopal, CA & Vasudev Rao, BVM, Senior Manager – Finance attended the personal hearing held on 25-11-2021. The authorized representatives reiterated their averments in the application submitted and contended as follows:

1. That, they are into supply of Digital Class rooms specifically interactive flat panels.

2. That in their opinion the interactive flat panels fall under HSN 8471.

3. That, they seek clarification regarding the opinion expressed.

7. Discussion & Findings:

The commodity dealt by the applicant according to the Material papers provided by them has the following features:

Feature Description
Computing Quad Core, ARM Cortex A73 processor with 2 GB ram and 16 GB internal storage running Android Oreo 8.
Display 65″ TFT LCD screen with 16:9 aspect ratio capable of displaying 1.07 Billion colors.
Interactivity Full screen touch with 15 continuous touch points. Physical buttons for power, menu, volume controls and source selection.
Connectivity HDMI, USB, LAN, VGA, CVBS, Mic, Headphone are available to receive signals from other Automatic Data Processing Machines
Audio Dual front facing speakers 2×15 Watts.
Power 100V-240V AC

The notes in Chapter 84 of the HSN in Custom Tariff Code defines automatic data processing machine as follows at para-5:

“5.(A) For the purposes of heading 8471, the expression “automatic data processing machine” means machine capable of :

(i) storing the processing programme or programmes and at least the data immediately necessary for the execution of the programme;

(ii) being freely programmed in accordance with the requirements of the user;

(iii) performing arithmetical computations specified by the user; and

(iv) executing, without human intervention, a processing programme which requires them to modify their execution, by logical decision during the processing run.

(B) Automatic data processing machines may be in the form of systems consisting of a variable number of separate units.

(C) Subject to paragraphs (D) and (E), a unit is to be regarded as being part of an automatic data processing system if it meets all of the following conditions :

(i) it is of a kind solely or principally used in an automatic data processing system;

(ii) it is connectable to the central processing unit either directly or through one or more other units; and

(iii) it is able to accept or deliver data in a form (codes or signals) which can be used by the system. Separately presented units of an automatic data processing machine are to be classified in heading 8471.

However, keyboards, X-Y co-ordinate input devices and disk storage units which satisfy the conditions of (ii) and (iii) above, are in all cases to be classified as units of heading 8471.

(D) Heading 8471 does not cover the following when presented separately, even if they meet all of the conditions set forth in paragraph (C):

(i) printers, copying machines, facsimile machines, whether or not combined;

(ii) 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) loud speakers and microphones;

(iv) television cameras, digital cameras and video camera recorders;

(v) monitors and projectors, not incorporating television reception apparatus.

(E) Machines incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings.”

The chapter specifically contains Entry 8471 as follows:

Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included.”

Further specific Entry 847141 contains:

Other automatic data processing machines, comprising in the same housing at least a central processing unit and as input and output unit, whether or not combined.”

The goods sold by the applicant has a Central processing unit, memory & storage with an onscreen display of output which is based on the input supply by the user. Therefore in view of the notes to Chapter 84 and also the HSN entries under 8471, the goods fall under HSN 8471.

8. The ruling is given as below:

In view of the above discussion, the questions raised by the applicant are clarified as below:

Questions Ruling
Whether the appropriate HSN classification of the above described Interactive Flat panel with Android would be under the heading 8471? Yes.

Download Judgment/Order

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