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of <h1>Classification of Hybrid Hydraulic Servo System for Customs Tariff with Applicable Tax Rate Determination</h1> <h3>In Re: M/s. Dyna Automation Private Limited,</h3> In Re: M/s. Dyna Automation Private Limited, - 2022 (58) G.S.T.L. 472 (A. A. R. - GST - Guj.) Issues Involved:1. Classification of the Hybrid Hydraulic Servo System.2. Applicable tax rate on the Hybrid Hydraulic Servo System.Detailed Analysis:Classification of the Hybrid Hydraulic Servo System:The applicant, M/s. Dyna Automation Private Limited, sought an advance ruling on the classification of their product, the Hybrid Hydraulic Servo System, which is used as part of various machines like Plastic Injection Moulding Machines, Rubber Injection Moulding Machines, and machine tools in hydraulic presses, among others. The applicant contended that the Hybrid Hydraulic Servo System should be classified under Tariff Item 84799090 of the First Schedule to the Customs Tariff Act, 1975, as it is used as a part of machines or machinery.The Authority for Advance Ruling (AAR) examined the provisions of both the CGST Act and the GGST Act, noting that the provisions are the same except for certain specific provisions. The AAR considered the relevant facts and the applicant's interpretation of the law. They referred to Note 2 of Section XVI of the Customs Tariff Act, 1975, which provides rules for classifying parts of machines. According to these rules, parts suitable for use solely or principally with a particular kind of machine are to be classified with the machines of that kind.The AAR also referred to the General Note of Parts of Section XVI of the Harmonised System of Nomenclature (HSN), which states that parts suitable for use solely or principally with particular machines are classified in the same heading as those machines. The applicant's product, Hybrid Hydraulic Servo System, is used in various machines to provide precise pressure and flow control, thus avoiding energy waste. However, the AAR noted that the product does not have individual functions and cannot perform its function independently, which is a prime condition for classification under Heading 8479 of the Customs Tariff Act, 1975.Applicable Tax Rate on the Hybrid Hydraulic Servo System:The applicant also sought an advance ruling on the applicable tax rate for the Hybrid Hydraulic Servo System. The AAR referred to Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017, which prescribes the GST rates based on the classification of the product. The AAR concluded that the GST rate would be determined according to the classification of the Hybrid Hydraulic Servo System under the Customs Tariff Act, 1975.Ruling:1. Classification: The Hybrid Hydraulic Servo System merits classification in terms of Note 2 of Section XVI of the Customs Tariff Act, 1975, and the General Note of Parts of Section XVI of the Harmonised System of Nomenclature.2. Applicable Tax Rate: The GST rate would be leviable on the basis of the classification of the product, as specified under Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017.
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