Commercial identity test governs classification of ticketing machines, excluding concessional treatment as information technology products.

A portable hand held electronic ticketing machine was examined by its commercial identity, not its technical description, for classification under the Karnataka VAT concessional entry for information technology products. The notification adopted heading 8471 for automatic data processing machines and units, but ticket-issuing machines are specifically covered by heading 8470, and heading 8471 excludes goods elsewhere specified or included. As the machine was understood in trade as a ticket issuing machine, it could not be classified under heading 8471 and did not qualify for tax at the 4% concessional rate; the residuary rate applied.

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Issues: Whether a portable hand held electronic ticketing machine is an information technology product classifiable under heading 8471 so as to qualify for tax at 4% under the relevant notification and the Third Schedule to the Karnataka Value Added Tax Act, 2003.

Analysis: The product was examined in its commercial identity and not by its technical or scientific description. The notification treating specified goods as information technology products adopted the tariff description of heading 8471, which applies to automatic data processing machines and units thereof, whereas ticket-issuing machines are expressly covered by heading 8470 of the Central Excise Tariff Act, 1985. Since the machine manufactured and sold by the assessee was understood in trade as a ticket issuing machine, and since heading 8471 excludes goods elsewhere specified or included, the product could not be brought under the information technology entry for concessional taxation.

Conclusion: The machine was not classifiable under heading 8471 and was not entitled to tax at 4%; the residuary rate applied.

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