Imported airsprings for Indian Railways not classified under HSN Heading 8607 but under Chapter Heading 4016

The case involved the classification of imported airsprings for manufacturing air-spring assemblies for Indian Railways under HSN Heading 8607. The applicant argued for this classification, but the ruling authorities disagreed, stating the airsprings made of rubber should be classified under a different heading. Consequently, the airsprings were not classified under Heading 8607 but under Chapter Heading 4016, with an 18% GST rate. The issues related to competitors' airsprings classification and eligibility for similar classification were deemed beyond the scope of the ruling.

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Issues Involved:
1. Classification of imported airsprings under HSN Heading 8607.
2. Applicable rate of tax under GST notifications if classified under HSN Heading 8607.
3. Classification of competitors' airsprings under HSN Heading 8607.
4. Correct classification and applicable tax rate if not classified under HSN Heading 8607.
5. Eligibility for classifying imported goods under HSN Heading 8607 like competitors.

Detailed Analysis:

Issue 1: Classification of imported airsprings under HSN Heading 8607
The applicant sought a ruling on whether the airsprings imported for manufacturing air-spring assemblies for Indian Railways are classifiable under HSN Heading 8607, which pertains to parts of coach work of railway running stock. The applicant argued that these airsprings are custom-made for railway coaches and have no other usage, thus fitting the description under HSN 8607. However, the jurisdictional GST Officer and the Authority for Advance Ruling (AAR) disagreed, stating that the airsprings are made of rubber, and as per Section Note 2(a) to Section XVII of the Customs Tariff Act, articles of vulcanized rubber other than hard rubber are excluded from Chapter 86. Consequently, it was ruled that it is not appropriate to classify the airsprings under Heading 8607.

Issue 2: Applicable rate of tax under GST notifications if classified under HSN Heading 8607
Since the classification under HSN Heading 8607 was negated, this issue became moot and was not considered further.

Issue 3: Classification of competitors' airsprings under HSN Heading 8607
The applicant queried whether the airsprings imported by its competitors are classifiable under HSN Heading 8607. The AAR ruled that this question is out of the purview of the mandate of Advance Ruling as per Section 95(a) of the GST Act, which limits the scope to the supply of goods or services by the applicant.

Issue 4: Correct classification and applicable tax rate if not classified under HSN Heading 8607
Upon determining that the airsprings do not fall under HSN Heading 8607, the AAR examined the correct classification. It was found that the airsprings, being made of vulcanized rubber, should be classified under Chapter Heading 4016, specifically under Tariff Item 4016 95 90. The applicable rate of GST for this classification is 18% (9% CGST + 9% SGST), as per Notification No. 1/2017-Central Tax (Rate).

Issue 5: Eligibility for classifying imported goods under HSN Heading 8607 like competitors
Similar to Issue 3, this question was deemed out of the purview of the mandate of Advance Ruling under Section 95(a), and thus was not addressed.

Ruling:
1. It is not appropriate to classify airsprings under Heading 8607.
2. The answer to the first question is negative.
3. Questions regarding the classification of competitors' imports and eligibility for similar classification are out of the purview of Advance Ruling under Section 95(a).
4. The correct classification of the airsprings is under Tariff Item 4016 95 90, with an applicable GST rate of 18% (9% CGST + 9% SGST).

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