GST classification turns on tariff description and use; sprayer pumps and wood-burning stoves were taxed, with no exemption available.
Classification under the GST rate notifications depends on the tariff description and proven use of the goods. Manually operated sprayer pumps were treated as mechanical appliances for projecting or spraying liquids and classified under Tariff item 84248100, attracting 18% GST up to 24.01.2018 and 12% from 25.01.2018. Wood-burning stoves were classified under Tariff item 73218990 and subjected to 12% GST. The goods were not covered by any exemption entry in Notification No. 02/2017-Central Tax (Rate), so nil-rate treatment was rejected.
Issues: (i) whether manually operated sprayer pumps manufactured and supplied by the applicant are classifiable under Heading 8424 and the applicable GST rate thereon; (ii) whether the stoves manufactured and supplied by the applicant are classifiable under Heading 7321 and the applicable GST rate thereon; and (iii) whether the said products fall under the exemption notification so as to attract nil rate of tax.
Issue (i): whether manually operated sprayer pumps manufactured and supplied by the applicant are classifiable under Heading 8424 and the applicable GST rate thereon.
Analysis: The product was examined with reference to its nature, use and tariff description. Sprayer pumps were found to be mechanical appliances for projecting or spraying liquids and, on the material placed, they were treated as agricultural or horticultural sprayers. The classification was considered under Heading 8424 of the First Schedule to the Customs Tariff Act, 1975 and the relevant entries in Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017, as amended. The entry was amended by subsequent notifications, including Notification No. 27/2017-Central Tax (Rate), Notification No. 41/2017-Central Tax (Rate) and Notification No. 06/2018-Central Tax (Rate), affecting the applicable rate from 18% to 12% from 25.01.2018.
Conclusion: The sprayer pumps were held classifiable under Tariff item 84248100, attracting 18% GST up to 24.01.2018 and 12% GST with effect from 25.01.2018.
Issue (ii): whether the stoves manufactured and supplied by the applicant are classifiable under Heading 7321 and the applicable GST rate thereon.
Analysis: The stoves were examined by reference to their description and use, including the fact that wood was used as fuel. They were treated as wood-burning stoves falling within Heading 7321 of the First Schedule to the Customs Tariff Act, 1975. On that basis, and with reference to entry 183 of Schedule II to Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017, the applicable rate was identified as 12% GST.
Conclusion: The stoves were held classifiable under Tariff item 73218990, attracting 12% GST.
Issue (iii): whether the said products fall under the exemption notification so as to attract nil rate of tax.
Analysis: The entries of Notification No. 02/2017-Central Tax (Rate) dated 28.06.2017 were examined, and the products were found not to be covered by any exemption entry.
Conclusion: The products were held not eligible for nil-rate exemption.
Final Conclusion: The applicant's claim for nil tax was rejected, and the products were held taxable at the rates determined under the relevant GST notifications according to their tariff classification.
Ratio Decidendi: Classification under the GST rate notifications depends on the tariff description and proven use of the goods, and exemption applies only where the goods squarely fall within a notified entry.
TaxTMI 
AI Drafter ✕
TaxTMI 
