TaxTMI 
TaxTMI 
2023 (1) TMI 495
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....fication No. 03/2017 -Central Tax (Rate) dated 28-06-2017. 2. Facts of the case:- 2.1 M/s Savex Technologies Private Limited (herein after referred to as "Applicant") is registered under GST vide GSTIN 22AAACS5547H2ZH and is engaged in the trading of electronic items such as projectors, LCD monitors, LCD screens and its after sales service & is also the distributor of Information Communication and Technology Products and allied services. Applicant has approached this authority under Section 97(2)(a) & (b) of the CGST Act, 2017 on the following questions: - a. Whether their product interactive Flat Panels (IFPs) being traded by the Applicant qualifies under Chapter heading 8471 41 90? b. Rate of fax applicable on such goods is 9% CGST & 9 % SGST in terms of Entry No. 360 to Schedule - III to Notification No. 01/2017 - Central Tax (Rate) dated 28.06.2017. 2.2 Applicant has purchased goods i.e., "BenQ Interactive Flat Panel RP7502 Black 75", from supplier namely i.e., M/s Benq India Private Limited vide Invoice Number TN-23-INV-10570 dated 19-May-2022. 2.3 That, the supplier in the present case has classified the goods under tariff Item 847141 90 charging....
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....ion/features has been enclosed. 3.2 The Applicant's Supplier i.e., Benq India Private Limited has also obtained BIS Certification dated 27.11.2020 for the aforesaid goods under the description "Interactive Flat Panel (Automatic Data Processing Machines)". 3.3 Further, that the aforesaid goods are indeed ADPM and thus are classifiable under CTH 8471 41 90 for the reasons explained above and that CTH 8471 41 90 covers "Other" ADPM comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined. Relevant portion of CTH 8471 has been extracted below for reference: 8471 AUTOMATIC DATA PROCESSING MACHINES AND UNITS THEREOF; MAGNETIC OR OPTICAL READERS, MACHINES FOR TRANSCRIBING DATA ON TO DATA MEDIA IN CODED FORM AND MACHINES FOR PROCESSING SUCH DATA, NOT ELSEWHERE SPECIFIED OR INCLUDED *** - Other automatic data processing machines: 847141 -- Comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined: *** 84714190 --- Other *** 3.4 that Note ....
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....in the headings appropriate to their respective functions or, failing that, in residual headings (See Part (E) of the General Explanatory Note to this Chapter). (A) AUTOMATIC DATA PROCESSING MACHINES The automatic data processing machines of this heading must be capable of fulfilling simultaneously the conditions laid down in Note 5 (A) to this Chapter. That is to say, they must be capable of: (1) Storing the processing program or programs and at least the data immediately necessary for the execution of the program; (2) Being freely programmed in accordance with the requirements of the user; (3) Performing arithmetical computations specified by the user; and (4) Executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run. Thus, machines which operate only on fixed programs, i.e., programs which cannot be modified by the user, are excluded even though the user may be able to choose between a number of such fixed programs. These machines have storage capability and also stored programs which can be changed from job to job. ....
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....r Note and Explanatory Notes, an ADPM is any machine which can store a processing programme; is freely programmable; performs arithmetical functions; and can execute logical decisions without intervention of humans. 3.7 Further, an ADPM must have a Central Processing Unit, an input unit and an output unit either in the same housing or separate processing, input and output unit interconnected to each other. 3.8 Therefore, for the purpose of being classified under CTH 8471 as an ADPM, a product must perform all the functions as listed under Chapter Note 5 (A) to Chapter 84. Further that the aforesaid goods satisfy all the aforesaid pre-requisites/conditions for the reasons tabulated below: Storing processing programme(s) for execution of programmes The aforesaid goods have an internal storage capacity of 16GB to 32GB. Thus, the aforesaid goods are machines capable of storing data or programmes for the execution of programmes. Thus, they satisfy the said condition (i) to Chapter Note 5 (A). Freely Programmable in accordance with the requirement of the user • According to HSN explanatory notes, machines which operate only on fixed programs are not ADPM. It f....
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....ng but an All in One Personal Computer 3.10 that the features and specification of the aforesaid goods, as mentioned supra, also clearly show That the aforesaid goods satisfy the requirement of an ADPM as contemplated under Heading 84.71 of the Customs Tariff. For the ease of reference, the same are extracted below: (a) Dual Core A73 + Dual Core A53/1.5 GHz (HV811) Processor; (b) Input unit (virtual keyboard/infra-red pen), output unit (display) & 4GB RAM along with 32GB Storage; (c) Android Operating System along with CPS slot which supports Ubuntu 14.04 or above, Windows 7/8/8.1 /10. Mac OS X 10.12 or above; (d) The machine can be programmed or modified in the manner in which the user wants; (e) That the aforesaid goods can be used identically as a regular personal computer; (f) The touch screen display feature makes it possible for the user to work with the machine in close proximity. 3.11 In fact, the specification/features are strikingly similar to another form of ADPM, viz., all-in-one Personal Computer ("All in One PCs"). The following table captures the similarity between the aforesaid goods and two other models of....
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....resaid goods deserve to be treated as ADPM. 3.15 The features of the aforesaid goods have been tabulated alongside the features of a tablet in order to show the similarly between the two products: FEATURES TABLET COMPUTERS AS PER CIRCULAR R/W WCO RULING RP7502 Display Touch Sensitive Display- 7 inches 75" 4K UHD with Fine + IR touch technology Central processing unit (CPU) to process data & Processor Yes. ARM Cortex-A8 Yes. Dual core A73-t-Dual core A53/ 1.5GHz (HV811) GPU Mali- G51MP4 Random-access memory (RAM) 0.512 GB RAM 4 GB RAM WiFi Yes. 802.11a/b/g/n No Cellular Connectivity Yes No Storage 16 / 32 GB Internal Storage-Expandable using SD card 32 GB Internal Storage Weight 400 gms 61 KG Battery 5100 mAh. Rechargeable. Battery Life- 9-10 hours Power Supply AC 100 to 240V, 50 to 60 Hz Processing Functions It can process data, execute programs, and connect to the Internet via a wireless network in order to. for example, exchange and manage e-mails, exchange or download files, download software applications, conduct video or VoIP ("Voice over Internet It can process data, e....
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....tially the same functionality as a laptop. The function as an Automatic Data Processing Machine (ADP) is the main function of the product, while other functionalities of said machines are not different from the auxiliary functions that could be seen on any computer, such as desktop or laptop computers. The mobile phone calling function could be provided by the products only as a supplementary function because it could not be activated without running an operating system of the "Tablet Computer", and in order to use the function a headset had to be used. The size of such machines when exceeding the dimensions mentioned in Note 8 to Chapter 84 relating to the "pocket-size" machines of heading 8470, is too big to be used principally for making voice calls. The tablet computers are not intended to be a substitute for a mobile phone to make voice calls, but, according to its main technical features is designed as a substitute for laptops. The difference between a "Smartphone" and a "Tablet Computer", is not based on whether the product has a voice calling function or not, but on the principal features that a producer has intended for the device when designing and developing it. 3.18 ....
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....g. 3.24 The aforesaid goods perform an array of functions beyond mere display of content. Thus, they cannot be said to perform function which is other than data processing. ln view of the above. Note 5(E) is not attracted to the aforesaid goods and the aforesaid goods are correctly classifiable as ADPMs under CTH 8471 3.25 In view of the some, the applicant has filed the instant application seeking ruling of this Hon'ble Authority on the following: - 3.26 The goods merit Classification as ADPM's under Chapter heading 8471. 3.27 The goods qualify in Entry 360 to Schedule - III of Notification No. 01 - 2017 & its rate of tax on supply is 9% CGST & 9% SGST? 4. Personal Hearing:- Keeping with the established principles of natural justice, personal hearing in the matter was extended to the applicant in person, as requested by them and accordingly, Shr. Jitendra Singh Khanuja, C.A.& authorized representative, of the applicant appeared before us for hearing on 10.08.2022 and reiterated their contention. 5. The legal position, analysis and discussion: - At the very outset, we would like to make it clear that the provisions for implementing the CGST Act and t....
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....de by the applicant and have examined the contentions raised by them. At the outset, we find that the issue raised in the application is squarely covered under Section 97(2)(a) and Section 97(2) (b) of the CGST Act 2017 being a matter related to classification of goods and applicability of a notification issued under the provisions of this Act. We therefore, admit the application for consideration on merits. 8. Now we proceed to decide the issues raised by the applicant on merits. On perusal of the Tax Invoice issued by BenQ India Pvt. Ltd. Tamil Nadu GSTIN: 33AACCA6005CIZI to the applicant M/s Savex Technologies Pvt. Ltd. Raipur (C.G.) GSTIN: 22AAACS5547H2ZH it is seen that the same depicts the product name as BenQ INTERACTIVE FLAT PANEL RE 6501 BLACK 65 IN, HSN Code as 84714190 with IGST charged @18%. The Bureau of Indian Standards has issued BIS certification granted license documents to the BenQ India Pvt. Ltd. mentioning the product name as INTERACTIVE FLAT PANEL (Automatic Data Processing Machine) vide Document No. R-41151858 dated 6.2.2020 and document doted 17.2.2020 (inclusion document). Besides this the bill of entry summary issued by the Indian Customs, Chennai Port t....
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....context, it is seen that Section XVI covers chapter 84 as under: - SECTION XVI MACHINERY AND MECHANICAL APPLIANCES; ELECTRICAL EQUIPMENT; PARTS THEREOF; SOUND RECORDERS AND REPRODUCERS, TELEVISION IMAGE AND SOUND RECORDERS AND REPRODUCERS, AND PARTS AND ACCESSORIES OF SUCH ARTICLES. Further, Section note at clause 4 to above chapter 84 stipulates that "4. Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in Chapter 84 or Chapter 85, then the whole falls to be classified in the heading appropriate to that function". 10.3 Similarly, for the sake of brevity, Chapter note 5 to chapter 84 is reproduced hereunder: - 5.(A) For the purposes of heading 8471, the expression "automatic data processing machine" means machine capable of (i) storing the processing programme or programmes and at least the data immediately necessary for the execution of the programme: (ii) being freely programmed in acc....
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....larly known as HSN. The rules of interpretation, section notes and chapter notes as specified under Customs Tariff Act 1975 are also applicable for classification of Goods under GST. Further, once an item is classified in accordance with Customs Tariff Act 1975, the rate of tax applicable would be arrived at on the basis of notifications issued under GST which in this case is Notification no. 01/2017-CT(Rate) dated 28.6.2017. 11. For ease of reference, the relevant portion of GST Notification No. 1/2017-Central Tax (Rate) dated 28^th June, 2017 is reproduced here under: - GOVERNMENT OF INDIA MINISTRY OF FINANCE Department of Revenue Notification No. 1/2017-Central Tax (Rate) New Delhi, the 28th June,20I7 G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby notifies the rate of the central tax of- (i) 2.5 percent. In respect of goods specified in Schedule I, (ii) 6 percent. In respect of goods specified in Schedule II, (iii) 9 percent. In respect of goods specified in Sche....
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....ding or tapping by removing metal, other than lathes (including turning centres) of heading 8458 350. 8460 Machine-tools for deburring, sharpening, grinding, honing, lapping, polishing or otherwise finishing metal, or cermets by means of grinding stones, abrasives or polishing products, other than gear cutting, gear grinding or gear finishing machines of heading 8461 351. 8461 Machine-tools for planing, shaping, slotting, broaching, gear cutting, gear grinding or gear finishing, sawing, cutting-off and other machine-tools working by removing metal or cermets, not elsewhere specified or included 352. 8462 Machine-Tools (Including Presses) For Working Metal by Forging, Hammering or Die Forging (Excluding Rolling Mills); Machine-Tools (Including Presses, Slitting Lines and Cut-To-Length Lines) For Working Metal by Bending, Folding, Straightening, Flattening, Shearing, Punching, Notching or Nibbling (Excluding Draw-Benches); Presses for Working Metal or Metal Carbides, Not Specified Above 353. 8463 Other machine-tools for working metal, or cermets, without removing material 354. 8464 Machine-tools for working stone, ceramics, concrete, asbes....
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....nd projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receiver or sound or video recording or reproducing apparatus [other than computer monitors not exceeding [32 inches], set top box for television and Television set (including LCD and LED television) of screen size not exceeding [32 inches]]"falling under Chapter / Heading / Sub-heading / Tariff item 8528 finds mention at Sr. no. 154 to Schedule IV appended to Notification no. 1/2017 CT(Rate) dated 28.6.201 7 attracting GST @ 14%+ 14%(CGST+SGST). 11.2 The applicant in their defense, aiming to bring home their point of contention that the impugned product is Automatic Data Processing machine classifiable under CH 8471 have compared the features and specifications of impugned goods with that of All-in-one personal computer and Tablet computer. The applicant has also tried to distinguish the impugned good from a Television by comparing the features. It has also been their contention that BIS certification has been done under the description "Interactive Flat panel (Automatic Data Processing Machines). This comparison of features with that....
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....ading 8471 ibid. Besides this, the technical information and parameters of the impugned goods intended to be traded by the applicant after its receipt from their supplier, consequent upon its import and supply by the supplier to the applicant is of much relevance for arriving at the appropriate classification of the same. Further this authority would like to mention here that although, there is nothing before us to suggest that the technology, per se, used in the impugned goods imported and thereafter supplied to the applicant, intended to be traded subsequently by the applicant perform any additional function such as receiving the composite video signals or convert input through VGA into an input for a video monitor etc., nevertheless the classification of the goods in question under heading 8471 claimed by the applicant would depend upon, the functionality of the same as also the rules of interpretation, section notes and chapter notes as specified and discussed herein above. 11.4 The applicant during the course of Personal hearing before us had referred to Customs AAR ruling in the case of M/s. Audio Distribution House Pvt. Ltd. by the Customs Authority for Advance Rulings, M....
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....s terms stipulates that Heading 8471 does not cover monitors and projectors, not incorporating television reception apparatus when presented separately, even if they meet all of the conditions set forth in paragraph (C). Needless to point out here that any subsequent modifications / additions / programming in the impugned goods technologically or otherwise before the intended supply/trade to be undertaken by the applicant, would alter the classification of the same based on the functionality of the machine, therein resulting in change in the applicable rate of GST. The rate of tax applicable on such goods depends upon the classification of the same and the effective rates of the same is specified in schedules appended to Notification no. 01/2017-CT(Rate) dated 28.6.2017 and subject to the adherence of stipulations as discussed above, the applicable Rate of tax is 9% CGST + 9%SGST on goods classifiable under 8471, in terms of entry no. 360 to Schedule-Ill to Notification no. 01/2017-CT(Rate) dated 28.06.2017. In case the goods in question are classifiable under heading other than 8471 owing to it functionality as discussed, the said goods will attract rate of tax as specified in the....