2018 (6) TMI 426 - AAR - GST

'Hydraulic Orbital Valve' classified under Tariff Heading 84.81 with corresponding GST rate. Decision based on product nature.

In Re : M/s. Dyna Automation Private Limited

The ruling authority classified the 'Hydraulic Orbital Valve' under Tariff Heading 84.81 of the Customs Tariff Act, 1975, with the corresponding GST rate. ... Classification of goods - Steering Unit (Hydraulic Orbital Valve) - Whether the said product falls under Chapter Heading 8481 or 8431 or 8708 of the Customs Tariff Act, 1975? - Rate of GST - Held that:- In view of Note 2(a) of Section XVI of the Customs Tariff Act, 1975 and Explanatory Notes for ‘Taps, Cocks, Valves and similar appliances for Pipes, Boiler Shells, Tanks, Vats or the like, including Pressure Reducing Valves and Thermostatically Controlled Valves’ under Tariff Heading 8481 of the Harmonised System of Nomenclature, the product ‘Steering Unit (Hydraulic Orbital Valve)’ is appropriately classifiable under Tariff Heading 8481 of the Customs Tariff Act, 1975 - as the expression “parts” and “parts and accessories” under Section XVII of the Customs Tariff Act, 1975 do not apply to articles of heading 8481 in view of Note 2(e) of Section XVII of the Customs Tariff Act, 1975, and the product ‘Steering Unit (Hydraulic Orbital Valve)’ is item of Tariff Heading No. 84.81, the said product cannot be considered to be parts of vehicle, as it is excluded from Section XVII and hence the said product do not fall under Tariff Heading 8708 as “Steering wheels, steering columns and steering boxes; parts thereof”. Ruling:- The product “Hydraulic Orbital Valve” is classifiable under Tariff Heading 84.81 of the Customs Tariff Act, 1975 and Goods and Services Tax rate applicable to Tariff Heading 84.81 is applicable to the said product. Issues:Classification and rate of GST for Hydraulic Gear Pump and Piston Pump used with specific equipment, agricultural machinery, and machine tools. Classification and rate of GST for Steering Unit and Servo Drive. Classification and rate of GST for Hydraulic Gear Flow Divider.Analysis:The applicant sought an advance ruling on the classification and GST rate for various products. Initially, questions were raised concerning several items, but during the personal hearing, the focus shifted to the classification of the Steering Unit. The applicant imported goods post-01.07.2017 and faced classification issues, leading to the payment of a higher IGST rate. The applicant argued that the Steering Unit should be classified under 8481 2000 with an 18% IGST rate. The Steering Unit was identified as a hydraulic valve used in agricultural machinery. The applicant provided evidence supporting the classification under Tariff Item 8481 2000.During the personal hearing, the applicant emphasized the correct classification of the Steering Unit under Heading 8481, supported by a sample and catalog. The Bill of Entry mentioned Heading 8708, prompting the applicant to demonstrate conflicting views within Customs. Subsequently, the applicant submitted additional documents, including the Bill of Entry, classifying the Steering Unit under Tariff Item 8481 2000. However, the Goods & Services Tax and Central Excise office highlighted the lack of detailed scrutiny due to the applicant's non-registration.The ruling authority considered all submissions and views presented, including those from the Goods & Services Tax and Central Excise office. The primary issue revolved around the classification of the Steering Unit under different tariff headings to determine the applicable GST rate. The authority referenced relevant notifications and legal precedents to guide the classification process. Notably, the authority cited the Explanation and rules for interpreting the Customs Tariff Act to support their decision-making process.The authority delved into the specific provisions of the Customs Tariff Act related to the classification of machine parts. They analyzed the applicant's arguments regarding the Steering Unit's classification under different headings, ultimately concluding that the product should be classified under Tariff Heading 8481. The authority justified this classification based on the product's nature as a hydraulic valve and its compatibility with the machinery specified under Tariff Heading 8481. Additionally, they emphasized that the Steering Unit did not fall under the exclusion criteria for vehicle parts, further supporting its classification under Heading 8481.In conclusion, the ruling determined that the 'Hydraulic Orbital Valve' should be classified under Tariff Heading 84.81 of the Customs Tariff Act, 1975, with the applicable GST rate corresponding to this classification.