2019 (12) TMI 1464 - AAR - GST

Classification of Air Conditioner Hose Assembly under GST Tariff 4009: 9% GST rate upheld.

The Authority classified the Air Conditioner Hose Assembly under Chapter Heading 4009 of the GST Tariff, subject to a GST rate of 9% as per Notification ... Classification of goods - rate of tax - Air Conditioner Hose Assembly (suction discharge) used as part of Air Conditioner Compressor - taxable under Chapter heading 4009 of Custom Tariff Act, 1975 or otherwise? - HELD THAT:- The hoses are made up of vulcanised Rubber other than hard rubber, as communicated by the applicant. Further as per the facts mentioned in the application for advance ruling the product under question is a part of gas compressor and not of air conditioners. Further prior to GST regime the applicant was also classifying the said product under the Chapter Heading 4009. Thus, the impugned product shall be aptly classifiable under Chapter Heading 4009 and accordingly liable to such GST rate as prescribed under Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 (as amended). Issues Involved:1. Classification of Air Conditioner Hose Assembly (suction/discharge) used as part of Air Conditioner Compressor.2. Applicable tax rate for the classification.Issue-wise Detailed Analysis:1. Classification of Air Conditioner Hose Assembly (suction/discharge) used as part of Air Conditioner Compressor:- Applicant's Submission: The applicant, a registered assessee under GST, manufactures Air Conditioner Hose Assemblies used in HVAC systems. They argued that before the GST regime, the product was classified under Chapter 4009 of the Central Excise Act, 1985, which pertains to tubes, pipes, and hoses of vulcanized rubber. They now seek reclassification under CSH 84149011, which covers parts of air or vacuum pumps and compressors used in refrigerating and air conditioning appliances.- Authority's Analysis: The Authority examined the submissions and noted that the issue falls under Section 97(2)(a) of the CGST Act, 2017, which pertains to the classification of goods or services. The Authority reviewed the relevant tariff headings:- Chapter 4009 of the Customs Tariff Act, 1975, describes tubes, pipes, and hoses of vulcanized rubber, with or without fittings.- Chapter 8415 describes air conditioning machines and their parts.- Precedent Case: The Authority referenced the case of Collector of Central Excise, Bangalore Vs. Aerolex Hose Industries, where it was determined that hose assemblies made of vulcanized rubber, not hard rubber, are more specifically described under Heading 4009 rather than Heading 84.31.- Conclusion: The Authority concluded that the hoses are made of vulcanized rubber other than hard rubber, and the product in question is a part of a gas compressor, not an air conditioner. Therefore, the product should be classified under Chapter Heading 4009.2. Applicable tax rate for the classification:- Applicant's Argument: The applicant cited Notification No. 1/2017-Central Tax (Rate) dated 28th June 2017, stating that Chapter Heading 4009 would attract a GST rate of 9% as CGST.- Authority's Analysis: The Authority confirmed that the classification under Chapter Heading 4009 is appropriate and referenced the same notification for the applicable tax rate.- Conclusion: The product 'Air Conditioner Hose Assembly' will be classified under Chapter Heading 4009 of the GST Tariff and will be subject to the applicable GST rate as per Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 (Sl. No. 119 of Schedule-III).Ruling:- The Authority ruled unanimously that the product 'Air Conditioner Hose Assembly' merits classification under Chapter Heading 4009 of the GST Tariff and is chargeable to GST at the applicable rate under the said tariff entry, as per Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017.- This ruling is valid subject to the provisions under Section 103(2) until declared void under Section 104(1) of the CGST Act, 2017.