2020 (9) TMI 547 - AAR - GST

Classification of Plastic Liquid Dispensers under GST: HSN Code Confirmed

The case involved the classification of 'Plastic Mechanical Liquid Dispensers' under GST and determining the correct HSN code for imported goods. The ... Classification of goods - HSN Code - Plastic Mechanical Liquid Dispenser - HELD THAT:- The applicant is engaged in importing various types of plastic devices intended to be screwed/fitted on the bottle/containers. These plastic devices are used for pumping/ dispensing liquid or lotion from a bottle and serves for the depletion of the contents, viz. liquid, gel, cream etc. During the period from 01.07.2017 to 14.11.2017 - Notification No.1/2017-Central Tax (Rate) dated 28th June 2017, as amended, is notified the CGST rates of intra-state supply of goods. During the period from 01.07.2017 to 13.11.2017, the Notification No.1/2017-Central Tax (Rate) dated 28th June 2017, provided rate of CGST @14% for ‘Other articles of plastics and articles of other materials-HSN 3926), vide Entry/S. No. of 45 of Schedule IV of said Notification - Thus, till 14.11.2017, items in question were levied GST @ 28%. During the period from 15.11.2017 and onwards - W. e. f. 15.11.2017, the items in question were levied GST @ 18% Thus, the imported Plastic Items, (stated as Plastic Mechanical Liquid Dispenser) shall be classified, under Chapter sub-heading 3926.90- Others, as “articles, not elsewhere specified or included, of plastics (as defined in Note 1 to the Chapter) or other materials of heading 39.01 to 39.14”. Accordingly, the said product is liable to GST @ 28% (CGST@14% +SGST@14%) till 14.11.2017 and @ 18% (CGST@9% +SGST@9%) w. e. f. 15.11.2017. Issues Involved:1. Classification of 'Plastic Mechanical Liquid Dispenser' under GST.2. Determination of the correct HSN code for the imported goods.3. Applicable rate of GST for the classified goods.Detailed Analysis:Classification of 'Plastic Mechanical Liquid Dispenser' under GST:The applicant, engaged in importing various types of plastic devices from China, sought an advance ruling on the classification of these devices. These devices are used for pumping/dispensing liquids, gels, or creams from bottles and are intended to be screwed or fitted onto containers.Determination of the Correct HSN Code for the Imported Goods:The applicant initially classified the goods under HS Code 3923 (Caps & Closure) but was later asked to clear them under HSN 3926 (Other articles of Plastics) bearing GST of 28%. The applicant was uncertain about the correct HSN and noted that competitors were using HSN 8424 and 9616, leading to confusion.Chapter Heading 9616:- Applicant's Argument: The imported pumps/sprayers are solely used to disburse liquid/gel products and do not function as 'scent sprays or similar toilet sprays' described by Tariff heading 9616.- Authority's Conclusion: Chapter sub-heading 9616 is specific to scent sprays and similar toilet sprays and does not cover generic goods. Therefore, the classification under Chapter Heading 9616 is not appropriate.Chapter Heading 8424:- Applicant's Argument: The devices should be classified under heading 8424, which covers mechanical appliances for projecting, dispersing, or spraying liquids or powders.- Authority's Conclusion: The items in question are neither mechanical appliances, fire extinguishers, spray guns, nor steam or sand blasting machines. They cannot be classified under CTH 8424.89 or 8424.90 as parts, since they are parts of general use of plastics (Chapter 39).Chapter Heading 3926 (Other articles of Plastics):- Authority's Conclusion: The plastic devices are used for pumping/dispensing liquid or lotion and are generic goods of plastics. They are not specified elsewhere in the Customs Tariff and are correctly classifiable under Chapter sub-heading 3926.90- 'OTHERS.'Applicable Rate of GST for the Classified Goods:- Period from 01.07.2017 to 14.11.2017: The items were levied GST @ 28% (CGST @14% + SGST @14%) as per Notification No.1/2017-Central Tax (Rate) dated 28th June 2017.- Period from 15.11.2017 onwards: The GST rate was revised to 18% (CGST @9% + SGST @9%) as per Notification No.41/2017-Central Tax (Rate) dated 14.11.2017.Ruling:Question: What is the HSN Code and rate of tax for Plastic Mechanical Liquid DispenserRs.Answer:- The imported Plastic Items, stated as Plastic Mechanical Liquid Dispenser, shall be classified under HSN Chapter sub-heading 3926.90- 'Others.'- The applicable GST rate is 28% (CGST @14% + SGST @14%) till 14.11.2017 and 18% (CGST @9% + SGST @9%) from 15.11.2017 onwards.