Classification of commercial coffee makers under Heading 8419, not domestic appliances, determined the applicable GST rate.

Commercially used coffee-making machines with higher capacity and thermostatic heating were classified under Heading 8419 because their principal function was non-domestic temperature-based treatment of materials, rather than as household coffee makers under Heading 8516. On that classification, the GST treatment followed the relevant notification periods: before the amendment, the goods fell under the applicable residuary entry, and from 15.11.2017, Heading 8419 goods not of a domestic kind attracted CGST and SGST at 9% each under the amended schedule entry.

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Issues: (i) Whether the two coffee-making machines were classifiable under Heading 8419 as machinery for treatment of materials by a process involving a change of temperature, or under Heading 8516 as coffee makers of a kind used for domestic purposes; (ii) Whether, on that classification, the goods were entitled to the GST rate applicable to Heading 8419.

Issue (i): Whether the two coffee-making machines were classifiable under Heading 8419 as machinery for treatment of materials by a process involving a change of temperature, or under Heading 8516 as coffee makers of a kind used for domestic purposes.

Analysis: The tariff entries and HSN explanatory notes showed that Heading 8419 covers machinery and plant used for heating, cooking or similar processes where the principal function is treatment of materials by temperature change, and that such heading includes specialised non-domestic heating or cooking apparatus. Heading 8516, on the other hand, covers electro-thermic appliances normally used in the household, including coffee or tea makers. The machines in question were found to be commercially used filter coffee makers with higher capacity, internal heating or thermostatic control, and were not of the domestic kind contemplated by Heading 8516. Their classification therefore depended on the function performed and their non-domestic character.

Conclusion: The two products were held classifiable under Heading 8419, specifically under tariff item 84198190, and not under Heading 8516.

Issue (ii): Whether, on that classification, the goods were entitled to the GST rate applicable to Heading 8419.

Analysis: Once the goods were placed under Heading 8419, the applicable rate depended on the relevant GST notifications. For the period before the amendment, the goods fell under the residuary entry for goods not specified in the relevant schedules. With effect from the amendment dated 14.11.2017, Heading 8419 goods not of a kind used for domestic purposes were specifically covered in the prescribed schedule entry attracting CGST and SGST at 9% each.

Conclusion: The goods were held taxable at CGST 9% and SGST 9% from 15.11.2017 under the amended schedule entry, and for the earlier period were covered by the applicable residuary rate.

Final Conclusion: The ruling accepted the assessee's classification claim under Heading 8419 and granted the corresponding GST treatment according to the relevant notification periods.

Ratio Decidendi: A commercially used coffee-making appliance whose principal function is non-domestic temperature-based processing of materials is classifiable under Heading 8419 rather than under Heading 8516, which is confined to electro-thermic appliances of a domestic kind.

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