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of <h1>Interactive flat panels classed under tariff heading 85285900 (IFPDs), not ADP machines; attract 28% GST</h1> <h3>In Re: M/s. Acer India Private Limited.</h3> In Re: M/s. Acer India Private Limited. - TMI ISSUES PRESENTED AND CONSIDERED 1. Whether the Interactive Flat Panel Display (IFPD) models described, having built-in processor, memory, storage, Android OS, multi-touch interface and various I/O ports, are classifiable as 'Automatic data processing machines and units thereof' under heading 8471 or as 'other monitors capable of directly connecting to and designed for use with an automatic data processing machine of heading 8471' under heading 8528 / subheading 85285900 for purposes of GST classification. 2. Conditional on the classification, what is the applicable rate of GST on the described IFPDs. ISSUE-WISE DETAILED ANALYSIS - ISSUE 1: CLASSIFICATION (8471 v. 8528/85285900) Legal framework 3. Relevant legal framework comprises: (a) General Rules of Interpretation (GIR) of the Harmonized System (Rules 1-3), (b) Section and Chapter Notes to Section XVI and Chapter 84 (notably Chapter Note 6(A) / Note 5 defining 'automatic data processing machine' (ADP) and paragraphs (B)-(E)), (c) principles that composite or multifunction machines are classified according to their principal function (GIR 3(b), Section XVI para 3, Chapter note para 8), and (d) the tariff descriptions and GST rate schedules (Notification No. 01/2017-CT (Rate) and subsequent amendments / circulars clarifying classification of IFPDs under customs notifications). Precedent treatment (followed/distinguished) 4. The Authority considered prior AAR and tribunal decisions that held similar IFPs to fall under heading 8471 (decisions referenced include multiple AAR and tribunal pronouncements and cross-rulings under HTSUS). It also noted a Supreme Court decision on 'All-in-One Integrated Desktop Computer' distinguishing portability aspects. The Authority treated those decisions as persuasive on the technical capacity of certain IFPs to meet ADP criteria but did not treat them as determinative where the principal function differed. The Authority also considered recent CBIC Circular/Notification (2025) prescribing technical specifications and distinguishing IFPDs from other monitors for classification purposes under customs notifications - this administrative clarification was treated as authoritative for classification in the absence of specific tariff entries for IFPDs. Interpretation and reasoning 5. The Authority analysed both the functional/technical criteria for heading 8471 and the commercial/primary purpose of IFPDs. It acknowledged that the described IFPDs possess features enumerated in Chapter Note 6(A) (storage of programs/data, programmability, capacity to perform computations, and ability to execute stored programs without human intervention) and that under a narrow technical test such devices may qualify as ADP machines. 6. However, applying GIR 3(b), Section XVI para 3, Chapter note 6(E) and para 8, the Authority emphasised the rule that composite or multifunction machines must be classified according to their principal function. The Authority concluded that while the IFPDs incorporate ADP features, their principal/essential character is to serve as large interactive display devices (output/display for large audiences; multi-touch interactive surface for collaboration and teaching) rather than primary data processing systems. 7. The Authority further relied on the CBIC clarification and the 2025 customs amendment that expressly distinguishes IFPDs from ordinary monitors and assigns a customs classification under subheading 85285900 for IFPDs (together with technical specifications provided by Ministry of Electronics and Information Technology). The circular/notification was treated as material in ascertaining the intended tariff treatment adopted administratively to distinguish monitors/IFPDs from ADP machines. 8. The Authority examined trade/'common parlance' arguments advanced by the applicant and prior authorities finding IFPDs to be ADP machines. It observed that commercial nomenclature alone cannot override tariff interpretation but acknowledged its relevance; nonetheless, it placed greater weight on the product's principal/ultimate end use and the combined effect of GIR and Chapter/Section notes which require classification by principal function where multiple functions exist. Ratio vs. Obiter 9. Ratio: The binding ratio is that when a machine incorporates ADP features but its principal function is that of an interactive large display (IFPD) - i.e., designed primarily to provide large audience display and interactive touch features - the device must be classified according to its principal function under GIR 3(b), Section XVI para 3 and Chapter note para 8, and thus will be classifiable under the heading appropriate to monitors (subheading 85285900) rather than as an ADP machine (8471), notwithstanding the presence of embedded processing capability. 10. Obiter: Observations that certain IFPDs, which are sufficiently configured and used primarily as standalone computing systems (true All-In-One computers) or meet the strict technical tests of ADP machines, may be classifiable under 8471 - these are factual caveats and persuasive but not binding in the present decision. Conclusions 11. The Authority concluded that the described ACER IFP models, despite embedded processors, storage and OS, are classifiable under subheading 85285900 (other monitors / IFPDs) because their essential/principal character is to function as large interactive display devices for audiences; they are not primarily ADP machines. The Authority therefore disallowed classification under heading 8471 for the models as presented. ISSUE-WISE DETAILED ANALYSIS - ISSUE 2: APPLICABLE GST RATE Legal framework 12. GST rates depend on the tariff classification. Schedule entries to Notification No. 01/2017-CT (Rate) allocate 9% CGST + 9% SGST (18% IGST) to goods under 8471, whereas other headings, including monitor classifications, attract different rates as per the schedules (the Authority identified 28% GST as applicable to the heading under which these IFPDs were classified). Precedent treatment 13. Prior rulings that classified IFPDs under 8471 naturally applied the 9%/9% schedule; rulings/classifications placing the goods under monitor headings applied the corresponding higher rates. The Authority referenced jurisdictional input noting that if goods are classifiable under headings other than 8471 their rate may be higher (including 28%). Interpretation and reasoning 14. Having classified the subject IFPDs under subheading 85285900, the Authority determined the applicable GST rate according to the rate notification schedules corresponding to that tariff description. The Authority noted administrative guidance (Circular/Notification) and the schedule entries indicating the effective rate for monitors/IFPDs not covered by the 8471 entry. Ratio vs. Obiter 15. Ratio: The applicable rate conclusion is binding to the extent it follows classification - goods classifiable under subheading 85285900 (as IFPDs) attract the GST rate specified for that heading (in the decision, 28%). This is a direct corollary of the classification ratio and tariff-linked rate schedules. 16. Obiter: Remarks about alternative rates that would apply if a specific model were demonstrably an ADP machine under 8471 (and thus attract 9% CGST + 9% SGST) are explanatory and contingent on a different factual classification; they do not alter the ruling on the specific models before the Authority. Conclusions 17. The Authority ruled that the described ACER Interactive Flat Panels are classifiable under subheading 85285900 and the applicable GST rate on those models is 28% (as per the relevant rate schedules for that tariff description). The rate applicable would change only if a particular model were shown to have principal function of ADP machine and thus be classifiable under 8471. CROSS-REFERENCES AND BINDING EFFECT 18. The Authority recorded that advance rulings bind the applicant and the concerned/jurisdictional officer unless the law, facts or circumstances change or where the ruling was obtained by fraud/suppression (statutory binding effect and exceptions noted). 19. The Authority cross-referenced prior AAR, tribunal and foreign HTS rulings as persuasive materials and distinguished them on factual grounds where appropriate; it treated the CBIC administrative clarification and notification changes as significant in the present factual matrix.
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