2019 (3) TMI 705 - AAR - GST

Ball Point Pens: 'Tips and Balls' GST Classification & Schedule III Inclusion

The Authority ruled that 'Tips and Balls' of Ball Point Pens are classified under GST Tariff Heading 96089990 and included under Sl No. 453 of Schedule ... Classification of goods - classification under HSN heading 9608 (pen parts) - distinction between pen nibs and ball-point tips - interpretation of Tariff Act descriptive dashes for sub-classification - applicability of the Rate Notification for determining tax rate - inclusion in Schedule III attracting 9% CGST and 9% SGSTClassification of goods - distinction between pen nibs and ball-point tips - interpretation of Tariff Act descriptive dashes for sub-classification - classification under HSN heading 9608 (pen parts) - inclusion in Schedule III attracting 9% CGST and 9% SGST - applicability of the Rate Notification for determining tax rate - Classification of 'tips and balls' of ball-point pens and the applicable rate under the Rate Notification. - HELD THAT: - The Authority examined the products and held that the terms 'nib' and 'tip' denote distinct pen components with different anatomy and modes of ink delivery; the applicant's samples correspond to ball-point 'tips' (comprising the ball, socket and ink channels) and not to nibs used in fountain pens. Applying the Rules for Interpretation of the Tariff Act, the Authority treated Chapter 96 headings and their sub-classifications in the prescribed dash order and observed that parts of the articles in Chapter 9608 are classifiable under the residual 'Other' descriptions where specific sub-headings do not apply. Since the products are neither complete pens nor refills as described at sub-heading 9608 60, and are not pen nibs (9608 91), they fall within the 'Other' category and specifically under sub-heading 9608 99 90. Having so classified the goods under HSN 9608 99 90, the Authority examined the Rate Notification and found that parts of pens classifiable under HSN 9608 are not separately exempted or placed in a different schedule; accordingly such parts are includible under Sl. No. 453 of Schedule III of Notification No. 01/2017-Central Tax (Rate) and liable to tax at 9% CGST and 9% SGST. [Paras 4]'Tips and Balls' of ball-point pens are classifiable under GST Tariff Heading 9608 99 90 and are included under Sl No. 453 of Schedule III of the Rate Notification, taxable at 9% CGST and 9% SGST.Final Conclusion: The Authority ruled that the pen 'tips and balls' submitted by the applicant are parts of ball-point pens classifiable under HSN 9608 99 90 and are taxable under Schedule III at 9% CGST and 9% SGST (Sl. No. 453 of the Rate Notification). Issues:1. Admissibility of the Application2. Submissions of the Applicant3. Submissions of the Revenue4. Observation & Findings of the AuthorityAdmissibility of the Application:The Applicant sought a ruling on the classification and tax rate of pen tips and balls used in manufacturing ball point pens. The Authority found the questions admissible under Section 97(a) & (b) of the GST Act as they involved classification for determining the applicability of the Rate Notification. The Application was admitted as the questions were not decided by any authority, and no objections were raised.Submissions of the Applicant:The Applicant initially referred to the products as ball point pen balls and 'Tips,' later interchanging the terms with 'Nibs.' The Authority requested samples for clarification. The Applicant's submissions focused on the classification and tax rate of the pen parts under consideration.Submissions of the Revenue:The Revenue argued that pen balls and tips are parts of refills, not standalone products, and should be classified under the residuary sub-heading 96089990, attracting GST at 18%. They contended that the anatomy and functionality of nibs and tips are distinct, leading to different classifications and tax rates.Observation & Findings of the Authority:The Authority clarified the differences between nibs and tips, emphasizing their unique features and functions in pen anatomy. Based on the terminology and samples provided, the Authority determined that the products in question were pen balls and tips. Following a detailed analysis of the Tariff Act and Rate Notification, the Authority classified the pen parts under 96089990, taxable at 9% CGST and 9% SGST.Ruling:The Authority ruled that 'Tips and Balls' of Ball Point Pens are to be classified under GST Tariff Heading 96089990 and included under Sl No. 453 of Schedule III of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017. This ruling is valid unless declared void under the provisions of the GST Act.