Stesalit Limited & Anr. Vs Union of India & Ors. (Delhi High Court)
Delhi High Court examines GST rate dispute on railway AC units, reviewing a government circular imposing 28% vs. advance rulings supporting 18%.; Delhi High Court to Examine GST Rate on Railway AC Units; Dispute Pits 28% Rate Circular Against 18% Advance Rulings
New Delhi: The Delhi High Court is set to decide the correct Goods and Services Tax (GST) rate applicable to Roof Mounted Package Unit (RMPU) air conditioning machines specifically designed for railways. The ongoing legal challenge involves a face-off between a government circular mandating a higher tax rate and previous rulings by Advance Ruling Authorities that supported a lower rate.
The case, brought by Stesalit Limited and its director, concerns the classification of these specialised AC units under the GST framework. The core of the dispute lies in whether RMPUs should be categorised under Harmonised System of Nomenclature (HSN) Code 8415, typically covering general air conditioning machines and attracting a 28% GST rate, or HSN Code 8607, which pertains to parts of railway or tramway locomotives and attracts an 18% GST rate.
According to the petitioners, RMPUs, manufactured specifically for Indian Railways with tailored designs, have historically been classified under HSN 8607, with the corresponding 18% GST rate being the accepted practice. They contend that their business operations and existing supply agreements with the railways are based on this understanding.
