Application on Wheel Side Protection and Pantograph Classification Barred Under Section 98(2) CGST Act Due to Ongoing Investigation

The AAR held that the application challenging the classification of Wheel Side Protection Control Unit and Pantograph under CTH 8607 was inadmissible under Section 98(2) of the CGST Act, as the issue was already under investigation by DGGSTI. The investigation, initiated before the application, concerned the classification and GST rate on goods supplied by the applicant to Indian Railways, including the subject products. The authority found that the question raised was pending in ongoing proceedings and thus barred admission of the application. The applicant's claim that the investigation was generic and did not cover the Pantograph was rejected, as evidence showed the investigation encompassed all goods classified under CTH 8607 supplied to Indian Railways.

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ISSUES:

Whether the Wheel Side Protection Control Unit (WSP) and Pantograph supplied should be classified as "parts of railway or tramway locomotives or rolling stock, and parts thereof" under Heading 8607 for GST levy purposes.Whether the application for advance ruling on classification is admissible under Section 97/98 of the CGST Act 2017, considering ongoing investigations by the Directorate General of GST Intelligence (DGGSTI) on classification of goods supplied by the applicant.

RULINGS / HOLDINGS:

On classification: The applicant contended that WSP and Pantograph are "parts of railway or tramway locomotives or rolling stock" within Heading 8607, as they are "suitable for use solely or principally with the railway or tramway locomotives or rolling stock" and not covered under Note 2 to Section XVII, thus meeting the conditions for classification under Heading 8607.On admissibility: The application for advance ruling is not admitted under the first proviso to Section 98(2) of the CGST Act 2017, because the question raised is already pending in proceedings before the DGGSTI, which initiated investigations prior to the filing of the application, including classification of goods under Heading 8607 supplied to Indian Railways.

RATIONALE:

The legal framework applied includes Section 9(1), Section 97, and Section 98 of the Central Goods and Services Tax Act 2017, the Customs Tariff Act (Section XVII and Chapter 86), and relevant notifications and circulars governing classification of goods for GST purposes.Chapter Heading 8607 covers "parts of railway or tramway locomotives or rolling stock," including brake gear and other components "suitable for use solely or principally" with such vehicles, as per Note 3 to Section XVII and excluding goods specified in Note 2.The applicant's submissions detailed the technical constitution and exclusive railway use of WSP and Pantograph, supported by precedent case law and circulars confirming classification under Heading 8607 for railway-specific parts.Regarding admissibility, the first proviso to Section 98(2) CGST Act prohibits admission of applications where the question raised is "already pending or decided in any proceedings" under the Act. The summons and investigations initiated by DGGSTI from 10.10.2018 specifically cover classification and GST rate adopted for goods supplied to Indian Railways under Heading 8607, including the subject goods.Despite the applicant's contention that the investigation was generic and did not specifically include WSP and Pantograph, the authority found that classification of these products was part of the investigation, as evidenced by summons, statements, and show cause notices issued prior to the application.The issuance of a corrigendum to the show cause notice post-application filing was noted but did not alter the status of pending proceedings under the CGST Act for admissibility purposes.Consequently, the application was rejected on the ground of inadmissibility due to ongoing proceedings on the same question before another authority, consistent with statutory provisions and precedent.

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