2023 (6) TMI 905 - AAR - Customs

Classification and Duty Rates for DJI Mini 3 Pro Fly More Kit Items

M/s PN Trade and Services Versus The Commissioner of Customs (III), Mumbai

The ruling authority classified each item in the DJI Mini 3 Pro Fly More kit under specific subheadings based on their characteristics and functions. The ... Classification of goods intended to be imported - rate of tax / Basic Customs Duty (BCD) - DJI Mini 3 Pro fly more kit - classifiable under subheading 88071000 or not - HELD THAT:- The impugned propellers are used to provide thrust to DJI mini 3 pro drone. Subheading 88071000 specifically mentions, inter-alia, propellers to be used with drones falling under heading 8806. Therefore, these items are classifiable under subheading 88071000. The rate of duty is 2.5% - The screws for propellers are made of stainless steel and have standard threading. The goods are classifiable under subheading 73181900 as other threaded screws of steel. The rate of duty is 15%. The shoulder bag is used to store/carry one drone and accessories like one remote controller, three batteries, one charging hub, propellers, an ND filter set, a data cable, and an SD card. The interior has a divided compartment style. The outer surface is made up of Polyurethane (PU) sheeting of plastic, i.e., synthetic leather. The bag is designed to provide storage, protection, portability, and organization to a drone and its accessories. The applicable subheading is 42029200, which provides for 'other containers or cases; with outer surface of sheeting of plastics'. The rate of duty is 15% - The USB type-C cable is to be used for the two-way communication of information and data and/or DC voltage between the connected equipment. The cable is insulated by plastic material. There are standard connectors on both ends. The applicable subheading is 85444220, which provides for 'Insulated wire, cable and other insulated electric conductors; Other electric conductors, for a voltage not exceeding 1,000 V; Fitted with connectors; Plastic insulated'. The rate of duty is 15%. The applicant in their CAAR-1 application inquired about the rate of duty applicable to the impugned goods. Accordingly, the rate of duty specified above for various goods is only the basic customs duty (BCD. However, the applicant is advised to refer to the ICEGATE website (https://www.icegate.gov.in/Webappl/index_im.jsp). to know about the effective rate of duty on subject goods, which includes, besides BCD, various cesses, IGST levy, other duties, etc. Thus, the goods under consideration are classifiable under the following subheadings of the Customs Tariff Act, 1975 having rate of duty (BCD):- Intelligent flight battery - subheading 85076000 - rate of duty 20%. Two-way charging hub - subheading 85371000 - rate of duty 15%. Propellers - subheading 88071000 - rate of duty 2.5%. Screws - subheading 73181900 - rate of duty 15%. Shoulder bag - subheading 42029200 - rate of duty 15%. USB 3.0 type -C data cable - subheading 85444220 - rate of duty 15%. Issues: Classification of DJI Mini 3 Pro Fly More kit and applicable rate of duty.Classification of Goods:The applicant sought advance rulings on the classification of the DJI Mini 3 Pro Fly More kit, specifically used with DJI Mini Pro 3 drones. The kit includes items like intelligent flight batteries, a two-way charging hub, propellers, screws, a shoulder bag, and a USB type-C data cable. The applicant argued that the goods should be classified under heading 8807, specifically under tariff entry 88073000, as they are solely used with the drone and are sold as a complete kit.Retail Sale Set Criteria Analysis:The ruling authority analyzed the kit under General Rule for Interpretation (GRI) 3(b) and Explanatory Note X, which state that goods put up in sets for retail sale must consist of different articles meeting a particular need or activity. However, as the individual items in the kit do not meet a specific need or carry out a particular activity, each product merits separate classification.Specific Tariff Entry Classification:The ruling authority further examined the classification based on the specific tariff entries for each item in the kit. Items like intelligent flight batteries, two-way charging hub, propellers, screws, shoulder bag, and USB type-C data cable were classified under their respective subheadings based on their characteristics and functions.Rate of Duty Determination:For each item in the kit, the ruling authority determined the applicable rate of duty. For instance, the intelligent flight batteries were classified under subheading 85076000 with a duty rate of 20%, the two-way charging hub under subheading 85371000 with a duty rate of 15%, propellers under subheading 88071000 with a duty rate of 2.5%, screws under subheading 73181900 with a duty rate of 15%, the shoulder bag under subheading 42029200 with a duty rate of 15%, and the USB type-C data cable under subheading 85444220 with a duty rate of 15%.Conclusion:In conclusion, the ruling authority classified each item in the DJI Mini 3 Pro Fly More kit under specific subheadings based on their characteristics and functions. The ruling provided the applicable rate of duty for each item, ensuring clarity on the classification and duty rates for the imported goods.