Just a moment...
Are you sure you want to delete your reply beginning with ' ' ?
Are you sure you want to delete your Issue titled: ' ' ?
All Issues
Join Channel 
1 
12 Sep 2023 
54 Replies 
7966 Views Dear experts,
Please clarify the HSN Code and the rate of GST with relevant notification issued by the GOI on the following goods:
1] Dentists' Chairs.
2] Instruments and appliances used in dental sciences.
If possible, any rulings on the classification of above goods rendered during pre or post GST regime.
of 3 
Press 'Enter' after typing page number.
Old Query - New Comments are closed.
0 Dear Sri Murthy Sir
Thank you so much for your response to the discussion on the subject issue. You have raised a good question. Let me try to answer like this:
1. The provisions of the Customs Tariff Act are inextricably interwoven with the GST Act to bring parity, to make the things simpler, for easy identification of goods and to reduce the number of disputes. As such they cannot be separated. Consequently under the GST Act, there is no provision to translocate the goods from one HSN to another nor is it permitted for the purpose of generation of higher revenue.
2. The Customs Tariff Act is predominantly binding both on the adjudicating authorities and the taxpayers under the GST Act. Keeping this governing principle in mind, I opine that, the subject Dentists’ chairs incorporating dental appliances or dental spittoons do fall under HSN 9018 and accordingly it attracts 12% tax thereon. This fact is not debatable. Even prior to the dawn of the GST regime, it was dutiable at 12% under the Customs Tariff Act and the same legacy has been continued since 01/07/2017, the birth of GST era. Therefore there is no basis to classify the subject goods under HSN 9402.
A perusal of the opening 'Notes' appended to the Chapter 94 of the Customs Tariff Act, as referred in our joint discussion, clearly establishes that, the GOI Notification No. 1/2017 has specifically taken care of the subject dentists’ chairs incorporating dental appliances or dental spittoons classifiable under HSN 9018 which has been specifically united with the Custom Tariff Act. The definition of 'dutiable goods' under Section 12 of the Customs Tariff Act means the goods, which are specified in the First Schedule of the Customs Tariff Act and which are subjected to the Customs Duty can alone be treated for payment of appropriate rate of tax under the GST Act too.
3. To put the entire discussion in few lines, the classification of goods under the GST Act has to be decided as per the Customs Tariff Act, its section notes, chapter notes and HSN explanatory notes alone. Here the Customs Tariff Act is the principal Act for classification of goods and determination of proper rate of tax under the GST Act. Other than the Customs Tariff Act, there is no alternative statutory mechanism to classify the goods for determination of proper rate of tax under the GST Act. Here I take the support of the judgement dated September 23, 2005 of the Hon’ble Supreme Court rendered in the case of Anand Nishikawa Co. Ltd Vs. Commissioner of Central Excise, Meerut reported in 2005 (9) TMI 331.
4. So applying the ratio of the well settled judgements of the Hon’ble Supreme Court, the subject goods, namely, Dentists chairs”, incorporating dental appliances or dental spittoons are the integral part of the dentists chairs without which they are incomplete and non-operational. Therefore I intend to classify them under HSN 9018. On this analogy only, the opening statutory notes to the Chapter 94 of the Customs Tariff Act has specifically excluded dentists’ chairs incorporating dental appliances or dental spittoons from classification of furniture falling under HSN 9402.
5 As far as your query on the confusion of the adjudicating authority is concerned, my view is like this:
Adjudication is not fictional. It is real. According to the prevailing data base of disputes, two-thirds of taxpayers feel that their adjudication “rarely” or never concluded in the interest of facts/law. Rather it is concluded for the revenue generation. This disillusionment is higher under the GST Act than average in the subsumed Acts. It is an alarm bell we cannot ignore. But today it is making us aware of the depth of change required. It is high time to change the way of adjudication, change of mind-set and it needs to be changed now. The adjudication process needs to develop its spine for honest and sustainable decisions and to remove institutional mistakes. If there is no random adjudication, then there is the proper adjudication which is based on definite set of rules and regulations. Adjudication means submitting to the truth and fighting for the truth.
6. The Hon’ble Supreme Court in number of its judgements has reiterated that, the concept of “ adjudication fairness” is not one-way street. It requires the adjudicating authority to furnish the copies of the documents upon which reliance has been placed….. the documents in possession of the adjudicating authority before forming an opinion. To this extent the principles of natural justice and concept of fairness are required to be the essential functions of the adjudicating authority. Therefore to make the GST Act result oriented as far as classification of goods is concerned, the principal Act, namely, the Customs Tariff Act, 1975 has to be applied simultaneously in symphonic manner. In doing so, no synthetic product would emerge. This inspiration is derived from Article 265 of the Indian Constitution--- “No tax shall be levied or collected except by authority of law”.
7. To conclude, the opening statutory notes to the Chapter 94 does not speak about the nomenclature of the goods but its essential identity and functionality of Dentists’ chairs incorporating dental appliances or dental spittoons which are used/usable only in dental science/hospitals/colleges and the like. Therefore they are to be classified under HSN 9018. I firmly stand by my entire discussion and conclusion.
8. TMI discussion forum is not a Court to rely upon it completely. It only guides to the needy. It is for the readers to take what suits to their taste.
8. Regarding the intent of the GST Council to bring such goods under the category of 18% tax, I am a too small person to calibrate it. Better the GST Council should come out with a “White Paper” on it. Further I bring it to your kind attention that, "whether the GST Council has such authority to classify the goods" is a question pending in the Hon’ble Delhi High Court. Since the matter is sub-judice, I refrain from commenting further.
Sir, you are at liberty to post your valuable comments, if any.
0 Sri Sadanad Bulbule Sir,
I am very much thankful to you sir, for your immediate response and for enlightening me about the law. It is also my honest view that “No tax shall be levied or collected except by authority of law” and at the same should not leave exigible revenue. This has been learnt from BA Naniappa you might know him. I have followed this principle when I was working in the department and even today. Unnecessarily, we should not burden businessmen on their genuine factors. The discussion made here on the Dentist's Chair is very interesting but unable to come to a stand since parts are taxable at 12% but the manufactured unit is liable to tax at 18%.
This is my personal view and for my knowledge.
With respect and regards.
0 Sh.Kalleshamurthy Murthy Ji,
Sir, I am very happy with your coming on and outpourings on the issue.
W..r.t. your observations, views and analysis at serial nos. 20 & 22 both dated 19.9.23, please oblige me by replying to my questions detailed below for enlarging my horizon on the issue :-
(i) What is the intention of the legislature in excluding dentists' chairs from Chapter 94 by way of Chapter Note 1 (ij) ibid ?
(ii) Are Chapter Notes of respective Chapters not an integral part of the Customs Tariff Act (as made applicable to GST Acts) ?
(iii) The Central Govt. has powers to reduce or increase the rate of tax by way of Notification. Should the notification not synchronize with the Tariff Act ?
(iv) Can any notification be contrary to Chapter or Chapter Note or Section Note or override the Act ?
Thanks & regards.
0 This has reference to S. No. 20 dated 20-09-2023 of TMI.
Dear Kasturi Sethi Ji,
Sir, I am much obliged to your kind reference.
It is true that the rate of taxes is identified based on the Excise Tariff and HSN Code.
(i) What is the intention of the legislature in excluding dentists' chairs from Chapter 94 by way of Chapter Note 1 (ij) ibid?
In my view, the intention of the Legislature is to levy tax on Dentist's chairs @18% as revealed from the following Notification.
GOVERNMENT OF INDIA MINISTRY OF FINANCE
(Department of Revenue)
Notification No.1/2017-Central Tax (Rate) New Delhi, dated the 28th June, 2017
| Schedule III – 9% | |||||||||
| Sl. No. 436 Tariff Code 9402: Medical, surgical, dental or veterinary furniture (for example, operating tables, examination tables, hospital beds with mechanical fittings, dentists' chairs); barbers' chairs and similar chairs, having rotating as well as both reclining and elevating movements; parts of the foregoing articles.
*** In the above Notification, the tariff head 9018 brought under the tax rate of 12% (Sl. No.218) Schedule II – 6%
| |||||||||
(ii) Are Chapter Notes of respective Chapters not an integral part of the Customs Tariff Act (as made applicable to GST Acts)?
I am not competent to interpret it as an "Integral Part" but whenever an enactment is made, undoubtedly, the classification of goods is based on the Excise & Customs Tariff Act.
(iii) The Central Govt. has powers to reduce or increase the rate of tax by way of Notification. Should the notification not synchronize with the Tariff Act?
Yes, of course.
(iv) Can any notification be contrary to Chapter or Chapter Note or Section Note or override the Act?
Sir, Good point has been raised. This is the fundamentality of the Constitution and is to be decided in the Competent Court of Law.
My view is that taxation is binding on the enactment and its base. It may be a decision of the Legislature or the fundamental basic Tariff Act. But before classifying a product it is to be decided based on the structure of the product and whether it falls under which tariff. Levy of tax is based on the provisions made referring to the relevant Acts. As is now as it is studied by me from the Central Board of Indirect Taxes & Customs – Central Excise Tariff 2017-18 (as on 30.06.2017), I didn’t find the words “Dentist’s Chair” in Chapter-90 Tariff Item 9018. However, it is mentioned under Chapter- 94 in Notes (1) (ij) as referred by Sir Kasturi Sethi Ji it is excluded from Chapter 94 with the words “Dentists Chairs” (9018). It may have appeared in any of the amendment Acts to refer like that but I have not come across such a provision. But in the interest of health care and the nature and characteristics of the product, in my view, it needs to be brought under the lower rate of tax as clinical services are exempted. Unless it is specifically clarified by the competent authority with specific Notification or directions, the dispute continues between the Department and the Taxpayers and the taxpayers suffer from the burden of tax and appeals.
With respects,
The above all are for discussion purposes with learned persons and not to be construed as an opinion on the subject matter.
0 Sh.Kalleshamurthy Murthy Ji,
First of all I am highly thankful to you for your response in a dignified manner.
It is beyond doubt and dispute that when dentist's chair is excluded from Chapter 94, tax cannot be demanded at higher rate under Chapter 94 by way of any notification by the department, if demanded then the SCN will be contrary to the Act and, rather, derogatory to the object of the Act.
As per the above case law in the case of State of Gujarat Vs. Lax Tools Manufacturing - 1978 (12) TMI 175 - GUJARAT HIGH COURT, Dental chair is a special kind of tool without which a dental surgeon would not be able to perform his job as a dental surgeon. A tool is covered in the legal and literal meaning of the word, 'Instrument' and the scope of this medical term is very very wide'.
Both the chairs being used by Doctor and patient are not articles of furniture and these are being used for medical treatment and hence are covered in the scope of the medical term, 'INSTRUMENT'
Your words extracted below:-
"It may have appeared in any of the amendment Acts to refer like that but I have not come across such a provision"
Sir, There is no room for uncertainty or possibility regarding arriving at correct classification of any product. I think the issue does not need any clarification from CBIC.
Anyhow, 'dissent is decent'.
Thanks and regards from the core of my heart.
0 Dear all
I fully endorse the last comments of Sri. K L Sethi Sir.
Facts are the doors for truth. So one has to touch the facts before he decides to decide the decisions. No one is authorized to manipulate or modify or alter the CTH, much less the GOI and the GST Department. It has no legal and territorial jurisdiction for such misadventure. This is not going to work legally and technically for any purpose. Despite, if the adjudicating authority dares to do it, then it is the sad part of adjudication. It means, it is not caring for the truth. This is the basic question the adjudicating authority has to address legally, carefully and consciously. The end result is written on the wall.
There is World Customs Organization [WCO] to decide all the matters relating CTH globally.
[ This is my personal opinion only. Readers are at liberty to disagree it also]
0 Sh.Sadanand Bulbule Ji,
Thank you very much, Sir.
In support of your views, here is another judgement of Hon'ble Supreme Court. Relevant extract is given below :-
"Adjudication - Classification of goods - Where two opinions are possible, assessee should be given benefit of doubt and the opinion favourable to it should be given effect to - Sections 11A(2) and 33 of Central Excise Act, 1944 - Rule 173B of Central Excise Rules, 1944." in the case of POULOSE AND MATHEN Versus COLLECTOR OF CENTRAL EXCISE - 1997 (2) TMI 98 - SUPREME COURT. Appeal allowed.
Relied in
0 Dear Sir Kasturi Sethi Ji and Sri Bulbule sir.
The response of Sri Kasturi Sethi Ji in Sl. No. 25 is affirmative and determinative. The Judgement referred to in Sl. No. 27, is a backbone for taking a firm stand. Now the issue is crystal clear. The discussions and the way of taking the matter into a finality with the various references to Judgements and Law are remarkable. Thanks to both of you Sirs.
With respects.
0 Dear all
Even the USA Customs Ruling Authority has held that, "Dentists' chairs incorporating dental appliances or dental spittoons are classifiable under HS 9018". Many EU nations while having Preferential Trade Agreements with third countries have recognized, adopted and amplified the classification of such dental chairs under HS 9018 only.
Ref: Customs Ruling of the USA-HQ 965968. December 16, 2002. CLA-2 RR: CR: GC 965968 DBS Category: Classification TARIFF NO.: 9405.40.60.Mr.Jack D.Mlawski, Galvin & Mlawski, 470 Park Avenue Suite 200 – South Tower, New York, NY 10016–6819.
With such global rulings on the subjects goods falling under HS 9018, there shall not be further doubts in the mind of the Adjudicating Authorities and they are bound to give effect to the same without any hesitation in the interest of natural justice.
0 Sh.Kalleshamurthy Murthy Ji,
Sir, Thanks a lot. Your concurrence with the views expressed by both of us on the issue matters a lot. Hope our voice will reach the Proper Officers of the department and we can expect natural justice in the interest of Trade and Industry.
0 Dear all
1.In continuation of our efforts in averting irrational interpretation of HSN 9018 under discussion, I wish to add the following relevant part of the ruling 27/10/2010 of the United States Court of International Trade, New York rendered in the case of TRUMPF MEDICAL SYSTEMS, INC[Plaintiff] Vs. UNITED STATES [Defendant] before: Pogue, Judge Court No. 07-00316.
In interpreting and applying the Harmonized Tariff Schedule of the United States [HTSUS], the court looks to the General Rules of Interpretation (“GRI”), as well as the Additional United States Rules of Interpretation (“ARI”). See Orlando Food Corp. v. United States, 140 F.3d 1437, 1439 (Fed Cir. 1998); Faus Group Inc. V. United States, 28 CIT 1879, 358 F.Supp 2d. 1244, 1250 (2004).
GRI (1) states that, for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the following provisions.
GRI (1) is “intended to make it quite clear that the terms of the headings and any relative Section or Chapter Notes are paramount, i.e., they are the first consideration in determining classification.” 1 World Customs Org., Harmonized Commodity Description & Coding Sys., Explanatory Notes 1 (3 ed. 2002) (“Explanatory Notes”).20 Thus, interpretation of tariff headings, and the court’s analysis, originate in the language of the Headings, Subheadings, Section Notes and Chapter Notes of the relevant parts of the Harmonized Tariff Schedule of the United States [HTSUS], in this case, Chapters 90, and 94.21
2. So for the purpose of present discussion also, the ratio of the above ruling squarely applies in classifying the "dental chairs incorporating equipment or dental spittoons" under HSN 9018 eligible to 12% tax. HSN 9018 recoznises such dental chairs as complete dental equipment on its base by itself. And the opening notes to HSN Chapter 94 plays a decisive role in this regard. Consequently in my considered opinion, it can never be interpreted as falling under HSN 9402 attracting 18 % tax and any attempt to do would be futile.
0 Dear all
With all this legal position, if the adjudicating authority is at cross roads, it is advised to seek expertise as provided under Section 153 of the GST Act from the Chief Commissioner of Customs or the DGFT for official clarification, who are the primary authorities to decide the classification of subject goods under HSN 9018 or otherwise. This clarification would be binding on all the stakeholders to avoid needless litigation.
0 Dear Sir,
This is with reference to your replies at serial nos.31 & 32 above, you are not only helping yourself but also others who are facing the same problem.
0 Dear Sir,
If the departmental officers has confusion regarding classification or rate of tax, the undermentioned case law may be useful in the above issue, if extended period has been invoked.
"There was confusion in minds of even Departmental Officers as to whether Service Tax was leviable on services provided by assessee, extended period cannot be invoked".--------Bombay High Court in the case of CCE, Nagpur Vs. Maharashtra State Seed Certification Agency - 2014 (12) TMI 1349 - BOMBAY HIGH COURT.
0 Dear all
Here I wish to add that, the ' Proper Officers' who are well acquainted with the provisions of the Customs Act and the depleted Central Excise Act and Service Tax Act as regards to the classification of goods or services under specific HSN/SAC, they might not find it difficult to accept the classification of goods/services falling under a specific HSN/CTH/SAC and the corresponding rate of tax under the GST Act.
On the other hand, factually the officers who are "new" to the provisions of the Customs Act and the depleted Central Excise Act or the Service Tax Act are suffering from deep confusion on this aspect. And the confusion is leading to needless disputes. So they are requested to upgrade themselves at par with the Customs Authorities or else seek their expertise in removing such confusion and disputes. This request is in the interest of enhancing the graceful adjudication by the other officers too and the slogan of ease of doing business becomes reality. Learning costs nothing but rewards the most and more. No one is born with encyclopedia.
Coming back to the issue on hand, from the highly reliable sources it is gathered that, the adjudicating authority under the CGST Act has accepted the classification of subject goods as falling under HSN 9018 4900 for the reasons discussed in the earlier paras. For confidentiality, the details of the case are not shared in the public platform.
0 Sh.Sadanand Bulbule Ji,
Sir, You and your client are very lucky because natural justice can be expected from only honest, impartial, unprejudiced ethical and knowledgeable A.A. The views expressed at serial no.35 dated 29.10.23 includes all your opinions expressed so far. Though still in the pipeline, I hope that your views will be ratified by the A.A and thus you will get justice at the first stage. (Adjudication stage).
(ii) As and when Order-in-Original is passed, it becomes public document. I request you to post the crucial para of the Order-in-Original here in public interest.
Thanks and deepest regards.
0 Sh.Sadanand Bulbule Ji,
Sir, The knowledge of The Customs Act, The Customs Tariff Act, The Central Excise Act, The Central Excise Tariff Act, The Financial Act, 1994 (Service Tax law) are an absolutely must for all the GST Officers. The GST Acts cannot be properly understood without the basic knowledge of the above Acts. The State GST Officers have no background of the above Acts and that is why the SGST Adjudicating Authorities are adjudicating the SCNs without granting an opportunity for personal hearing. It is a fact as so many cases are in High Courts and Appellate Authorities.
In order to lessen the work-load on the High Courts and the Appellate Authorities and save Govt.'s precious time, and also free the tax payers from rigours of avoidable litigation and stress and tension, the Govt. should arrange training to all the officers and impart basic knowledge of all the above Acts (including repealed Acts).
Your valuable advice/suggestion will prove panacea as this advice/suggestion is not only in the interest of new officers but also in the interest of Trade and Industry. Hence in the interest of our BHARAT also.
Hope your voice will reach the concerned higher GST Authorities.
Thanks for taking initiative.
0 Dear all
The Customs Tariff Act [CTA] including its chapter notes, headings, explanation and notifications have to be read in the literal words conjointly to determine the correct HSN and the rate of tax under the GST Act. Sometime it is allegorical. The obvious, accurate and thorough interpretation of the CTA in full is needed for the inspiration of the common man to understand deeper meanings often hidden in clues within the words of the CTA and to adopt them under the GST Act for proper classification of HSN/rate of tax.
The scholarly and reason guided minds can easily arrive at the reality of the law, without any intermediary, to unfold the truth. Then the tax payer and the Government enjoy greater authenticity of facts. But men with doubting mental state cannot arrive at such reality. Rather it disintegrates the clear perception. So deeper the true knowledge, higher the benefits of clarity and lesser the litigation.
0 Kerala High Court
Mubarak vs State Of Kerala - 2002 (9) TMI 903 - KERALA HIGH COURT
0 Dear all
"Happy Diwali. Let the festival of lights dispel the darkness of ignorance outside and inside."
The authority who uses pure wisdom, the highest gift of God to study sincerely the message of law and judicial rulings, find it faithful travel companion that will not only guide and encourage, but also caution and protect all the stakeholders equally. Blind attachment for unsustainable revenue is unacceptable nor it survives too. So why to waste precious time and energy to please a man in the darkroom? It is pointlessness. Let there be a full stop for this.
Absence of light means the darkness, the ignorance: absence of darkness means the light, the pure wisdom. Honesty comes with clarity and right results come from clarity.
Old Query - New Comments are closed.
of 3 Press 'Enter' after typing page number.
TaxTMI 
TaxTMI 
.jpg)