Water tank assemblies for railway passenger coaches classified under HSN 8607, attract 5% GST rate

AAR, Jharkhand ruled that water tank assemblies made of aluminum metal, specifically designed for Indian Railways passenger coaches, are classified under HSN Code 8607 rather than 7611. The authority determined these specialized tanks, manufactured per Railway specifications and fitted in passenger coaches, constitute railway bogie parts rather than general aluminum products. Consequently, they attract 5% GST rate as specified in notification 1/2017 under IGST Act, falling under entry 241 of Schedule I.

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Issues Involved:
Classification of goods 'water Tank Assembly of Aluminium metal' under chapter - 8607 or chapter - 7611 of the Tariff.

Analysis:
1. The applicant, M/s ASL Industries Limited, received a purchase order from the Central Railway for the manufacture and supply of a specific design water tank assembly. The applicant contended that the water tank assembly falls under entry no. 241 of Schedule I with an HSN code of 8607, making it taxable at 5% under IGST.
2. The applicant argued that the specially designed water tank assembly is exclusively used by the Indian Railway, fitted on the top of the roof of the bogie above the toilet. They emphasized that the tanks are not for general use and are specifically designed for railway coaches, falling under HSN code 8607.
3. The applicant referenced various sections of the Customs Tariff and judicial pronouncements to support their interpretation that the water tank assembly is an inseparable component of a Railway Passenger Coach, making it classifiable under HSN code 8607.
4. The Authority of Advance Ruling examined the submissions and the relevant provisions, including notification 1/2017 under heading 8607 of GST. They noted that the description of goods specified in the notification, such as parts of railway or tramway locomotives or rolling-stock, aligns with the applicant's case.
5. Considering the specific design, purpose, and use of the water tank assembly for Indian Railways, the Authority ruled that the specially designed water tank assembly falls under HSN Code 8607, as specified in entry no. 241 of Schedule I. Therefore, the assembly is deemed taxable at 5% under IGST.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the reasoning behind the decision made by the Authority of Advance Ruling in Jharkhand.

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