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Issues: (i) Whether electrical wiring harness manufactured by the applicant is classifiable under HSN tariff item 85443000 under heading 8544; (ii) what rate of CGST and SGST applies to the product and from which date.
Issue (i): Whether electrical wiring harness manufactured by the applicant is classifiable under HSN tariff item 85443000 under heading 8544.
Analysis: The product consisted of insulated wires and cables fitted with connectors and was used in vehicle brake systems. The tariff heading for 8544 covers insulated electric conductors whether or not fitted with connectors, and the HSN notes specifically include wire and cable cut to length or fitted with connectors and wiring sets of a kind used in vehicles. Section XVII excludes electrical machinery or equipment of Chapter 85 from the expression "parts and accessories" for motor vehicles. On that basis, the product fell within heading 8544 and specifically under tariff item 85443000.
Conclusion: The classification under HSN tariff item 85443000 was upheld in favour of the assessee.
Issue (ii): What rate of CGST and SGST applies to the product and from which date.
Analysis: Under Notification No. 1/2017-Central Tax (Rate), heading 8544 was placed in Schedule IV at 14% until the amendment by Notification No. 41/2017-Central Tax (Rate), which substituted the relevant entry effective from 15.11.2017. The amended entry reduced the applicable rate to 9%. The product therefore attracted 14% CGST and 14% SGST up to 14.11.2017 and 9% CGST and 9% SGST thereafter.
Conclusion: The claim for 9% tax from 01.07.2017 was rejected, and the reduced rate was held applicable only from 15.11.2017.
Final Conclusion: The ruling accepted the product classification under heading 8544 but limited the concessional tax rate to the period beginning 15.11.2017, thereby granting relief only in part.
Ratio Decidendi: Insulated wiring harnesses fitted with connectors and used in vehicles are classifiable under heading 8544, but the applicable tax rate depends on the entry in force in the relevant notification period.
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