TaxTMI 
TaxTMI 
2025 (12) TMI 1562
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....vide their application dated 25.02.2025 has submitted as follows: 2.1 M/s. Onyx Components & Systems Pvt. Ltd. (hereinafter referred to as "the Applicant"), is an ISO 9001:2015 certified company engaged in marketing and sale of electronic components and such goods include QUECTEL's GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-IOT Narrow Band LTE 4G) Modules & GPS Modules which are to be imported by air cargo mode through Hyderabad airport. 2.2 The applicant is filing the present application to seek advance ruling on classification of GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-IOT (Narrow Band LTE 4G) Modules & GPS Modules (also referred to as subject goods) under First Schedule to the Customs Tariff Act, 1975. These goods are used by OEM's (Original Equipment Manufacturer) in a variety of appliances or devices for transmission of data in a wired or wireless network. Further, Narrow band IoT (NB-IOT) is a low-power, wide-area network (LPWAN) technology developed to enable a wide range of IoT devices and services. It is a part of the LTE (Long-Term Evolution) family and is standardized by 3GPP (3rd Generation Partnership Project) under ....
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....egrated Circuits and are capable of providing wireless cellular internet connectivity or communication within the respective GSM, GPRS (2G), LTE(4G), NR (5G) Modules, NB-IOT (Narrow Band LTE 4G) Modules and GPS Networks that the device/ apparatus, in which the module is present in, is connected to. It may be noted that the said goods cannot function independently without other components of the device/ apparatus, to which the module would be connected to, for usage such as antennas, SIM card holder and a power source. 3.4 It is submitted in this regard that the subject goods are parts of devices or apparatus to which they are connected for the purpose of obtaining internet connectivity by utilizing any cellular network such as GSM, GPRS (2G), LTE(4G), NR (5G) Modules, NB-IOT (Narrow Band LTE 4G) Modules or for the purpose of receiving geolocation and time specific data by utilizing a satellite network such as GPS. It is necessary that a power source such as a battery along with an antenna is integrated in the apparatus/device to which the 'GSM/GPRS (2G) Mods LTE (4G) Modules, NR (5G) Modules, NB-IOT (Narrow Band LTE 4G) Modules and GPS Modules are connected or built Into. Mo....
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.... Videophones; (D) Apparatus for telegraphic communication other than facsimile machines of Heading 8443 (E) Telephonic or Telegraphic Switching Apparatus: (F) Transmitting and receiving apparatus for radio-telephony and radio-telegraphy, and (G) (Other communication apparatus) 3.9 Furthermore, as per Explanatory Notes of Heading 8517, the aforesaid Group (G) of Category II which deals with "other communication apparatus" Includes- "This group includes apparatus which allows for the connection to a wired or wireless communication network or the transmission or reception of speech or other sounds, images or other data within such a network. Communication networks include, inter alia, carrier-current line systems, digital-line systems and combinations thereof. They may be configured, for example, as public switched telephone networks, Local Area Networks (LAN), Metropolitan Area Networks (MAN) and Wide Area Networks (WAN), whether proprietary or open architecture. This group includes: (1) Network interface cards (e.g. Ethernet interface cards). (2) Modems (combined modulators- demodulators), (....
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....ectivity by modulating and demodulating the signals from the above-said GSM/GPRS/LTE/NR/ NB-IOT/ GPS modules and also has several other components. A GSM Cellular Modem generally consists of a GSM/GPRS/LTE/NR/NB- IoT) GPS Module along with few other components such as a SIM Card, an antenna, a device to modulate and demodulate the signals and power supply. c) An apparatus/ device, like a Electronic Data Capture (EDC) machine for example, is a complete device/apparatus that has a GSM/GPRS (2G) LTE(4G)/NR (5G) Modles/ NB-IOT (Narrow Band LTE 4G GPS cellular Module, a GSM GPRS (2G)/ LTE(4G)/ NR (5G) Modules/NB-IOT (Narrow Band LTE 4G / GPS Cellular Modem (could even be integrated) and other components like power source, processor, antenna, screen, keypad, speakers, microphone etc. It can electronically capture customer payment card details, allowing merchants to accept credit and debit card transactions through a cellular network connection established by use of the cellular module present in it. 3.12 Based on the above, it can be inferred that the subject goods are used as parts or components of apparatus/devices which can provide cellular/ satellite network connectivity ....
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....er such apparatus or machines. It must be noted that even though said Tariff Item is a residual entry, the same does not include parts and accessories of goods that are covered under Sub-heading 8517 69. Thus, the subject goods, being parts and not complete machines capable of Independent functioning, cannot be classified under 8517 6990. 3.17 It is submitted, in view of the above, that the subject goods, being parts and accessories of apparatus or machines described under Heading 8517, are classifiable under Sub-heading 8517 79, which specifically covers goods that are parts of apparatus described under Heading 8517. Further, in respect of the entries under Sub-heading 8517 79, the subject goods cannot be classified under Tariff Item 85177910 as GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-IOT (Narrow Band LTE 4G) Modules & GPS Modules are not parts or accessories in the nature of circuit boards whether populated, printed or stuffed. Thus, the subject goods are rightly classifiable under Tariff Item 8517 7990, which is the residual entry for parts of apparatus that are covered under other entries of sub heading 851779. 3.18 The applicant submits that descript....
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....n apparatus used for radio-broadcasting, whether combined, in the same housing, with sound recording or reproducing apparatus or a clock. From plain reading of the description, it can be observed that the primary characteristic of the goods covered under the said Heading are radio-broadcasting apparatuses, which may or may not be combined with other sound recording or reproducing apparatus and that such transmission or reception apparatus for radio broadcasting do not require any cellular internet or GPS connectivity modules or components for functioning. Thus, the subject goods are not transmission or reception apparatus of heading 8527. 3.22 It is further submitted in this regard that the description to Heading 8528 provides for monitors and projectors without reception apparatus and Includes reception apparatuses for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus. From plain reading of the above description, it can be inferred that modules are neither monitors and projectors nor can the subject goods be used as parts of such monitors and projectors. Further, such monitors and projector, that are covered ....
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....mponents such as antenna, SIM card and other User Interface (UT) components such as a display. Thus, classification under Heading 8517, which has a specific description the subject goods should be preferred in comparison to the generic description under Heading 8342, which is inclusive of chips that can be used in several devices to perform several functions unlike the subject goods that are used exclusively in devices or apparatuses that provide wireless internet connectivity for the transfer of various forms of data. 3.27 As per Rule 3(c), when goods cannot be classified by reference to Rule 3(a) or Rule 3(b), they shall be classified under the Heading which occurs last in numerical order among those which equally merit consideration. The goods under discussion in this opinion are not covered under two or more headings which are equally important. 3.28 Rule 4 states that goods which cannot be classified in accordance with the any of the preceding rules shall be classified under the Heading appropriate to the goods to which they are most akin. GSM, GPRS (2G), LTE (4G), NR (5G) Modules, NB-IOT (Narrow Band LTE 4G) Modules and GPS modules are integral parts or components of mo....
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....cts to a mobile telecommunications network using a Subscriber Identity Module (SIM) card, and communicates with digital devices (e.g., Modems, Routers, Agri-IoT terminals, Surveying Equipment such as Weather Stations, Vehicle Tracking Systems, Smart Meters, POS Terminals etc.) to transmit and receive data. Unlike conventional modems using wired 2 broadband connections, cellular modems utilize radio signals and base station protocols to provide internet or private network access over a wide geographical range, making them critical for remote or mobile applications. ⮚ CTH 8517 of the First Schedule to the Customs Tariff Act, 1975 corresponds to: "Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network ... " ⮚ As per HSN Explanatory Notes to Heading 8517, the said Heading covers - apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or ....
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....s. It is typically soldered onto or slotted into the main PCB of the modem. ⮚ The cellular module is an essential parts of modems and of any other apparatus / device which utilizes cellular/ satellite networks for transmission of different forms of data. Without such modules, devices such as modem that utilize cellular networks would be non-functional. Thus, the imported goods are parts of such apparatuses covered under Heading 8517. ⮚ Based on the above, it can be inferred that the subject goods are used as parts or components of apparatus/ devices which can provide cellular/ satellite network connectivity which are not capable of providing such internet connectivity in their imported condition and are to be assembled with other components to make a complete apparatus or device that can function utilizing such cellular or satellite network. ⮚ In view of the above-mentioned, it can be clearly observed that the cellular modules [GSM/GPRS (2G) Modules, LTE (4G) Modules, NR (5G) Modules, NB-IOT (Narrow Band LTE 4G) Modules, and GPS Modules] are only components or parts of apparatus or devices that are capable of cellular internet connect....
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....n booked, and no investigation is pending into the subject matters. ⮚ As per HSN Explanatory Notes to Heading 8517, the said Heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electromagnetic waves in a wireless network. It is to be noted that the subject modules are parts of devices which permit the transmission or reception of speech or other sounds, images or other data by electro- magnetic waves (i.e., cellular networks) in a wireless network. ⮚ Based on HSN Explanatory Notes to CTH 8517, it appears that the subject gods are used as part or component of apparatus/devices which can provide cellular/satellite network connectivity and also such subject goods are not capable of providing such internet connectivity in their imported condition and are to be assembled with other components to make a complete apparatus or device that can provide cellular network connectivity. ⮚ The details submitted by the applicant in their application have been examined, and it is opined that the....
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....ission and reception of data via cellular networks. The other side interfaces with an application processor or a Microcontroller Unit (MCU) that governs the overall functioning of the host device, along with a valid SIM (Subscriber Identity Module) card. The application processor is responsible for executing computing functions within the device and managing its various components-including the cellular module-for data communication. The cellular module, in turn, is the specific component that establishes connectivity with a cellular network using the antenna and a valid SIM card. These modules become operational only when integrated on a PCB, together with other supporting discrete components, and connected to a SIM card. They are then embedded into the final products such as cellular network modems, smart meters, agricultural IoT devices, surveying instruments (e.g., weather stations), vehicle tracking systems, and other similar equipment. Given that the subject goods serve as integral parts of apparatus or machines falling under Heading 8517, and are not capable of functioning independently in their imported condition, they are appropriately classifiable under Sub-heading 851....
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....that the Chapter Tariff Heading 8517 covers "Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525,8527 or 8528". The relevant portion of CTH 8517 is reproduced below for ease of reference: Subheading/Tariff Item Dash Description - Telephone sets, including smartphones and other telephones for cellular networks or for other wireless networks: 8517 11 -- Line telephone sets with cordless handsets: 8517 11 10 --- Push button type 8517 11 90 -- Other 8517 13 00 -- Smartphones 8517 14 00 -- Other telephones for cellular networks or for other wireless networks 8517 18 -- Other 8517 18 10 --- Push button type 8517 18 90 -- Other - Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (suc....
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....l or wide area network); III. Parts 7.3.6 As per HSN, the aforesaid category II has further been divided into the following groups: (A) Base station; (B) Entry-phone systems; (C) Videophones; (D) Apparatus for telegraphic communication other than facsimile machines of Heading 84.43; (E) Telephonic or Telegraphic Switching Apparatus; (F) Transmitting and receiving apparatus for radio-telephony and radio-telegraphy; and (G) Other communication apparatus. 7.3.7 As per Explanatory Notes, the aforesaid Group G relates to "Other communication apparatus" and is reproduced below: "This group includes apparatus which allows for the connection to a wired or wireless communication network or the transmission or reception of speech or other sounds, images or other data within such a network. Communication networks include, inter alia, carrier current line systems, digital-line systems and combinations thereof. They may be configured, for example, as public switched telephone networks, Local Area Networks (LAN), Metropolitan Area Networks (MAN) and Wide Area Networks (WAN), whether proprietary or open archite....
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.... card, and an antenna. These components are typically mounted on a Printed Circuit Board (PCB) and embedded within systems or devices such as smartphones, IoT devices, and cellular routers. As per technical submission made by the applicant, image of one of modem namely, 7SEMI LTE 4G Mini Modem is as under: The applicant submitted that these modules are parts of the cellular modem or other apparatus device which utilizes cellular/ satellite networks for transmission and reception of data. Therefore, it becomes pertinent to analyze whether the cellular module can be considered as a 'part' of cellular modem and of any other apparatus /device which utilizes cellular/satellite networks for transmission of different forms of data, attracting classification under CTH 8517. The term "parts" has not been defined in the HSN Explanatory Notes or the Customs Tariff. Hence, reliance must be made to the Hon'ble Supreme Court's judgement in the case of CCE, Delhi Vs. Insulation Electrical (P) Ltd., [2008 (224) E.L.T. 512 (S.C.)]. In this case, the Apex Court while relying on various other earlier judgments has defined the term "parts" as "an essential component of the whole ....
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....e 1 to this Section, Note 1 to Chapter 84 and Note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 84.84, 85.44, 85.45, 85.46 or 85.47) are to be classified according to the following rules: (a) Parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 84.09, 84.31, 84.48, 84.66, 84.73, 84.87, 85.03, 85.22, 85.29, 85.38 and 85.48) are in all cases to be classified in their respective headings;" (b) other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466,8473,8503,8522,8529 or 8538 as appropriate. [However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517, and parts which are suitable for use solely or principally with the goods of heading 8524 are to be classified in heading 8529]; (c) all other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 852....
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....ireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528- Parts-Other --- Other". Therefore, by virtue of GIR1, Note 2(b) to Section XVI, and Explanatory Notes to Heading 8517, the products in question i.e., GSM/GPRS (2G), LTE (4G), NR (5G), NB-IOT (Narrowband LTE 4G), and GPS modules are classifiable under CTI 85177990 (Other) of the First Schedule of the Customs Tariff Act, 1975. 8. The concerned jurisdictional Commissionerate has also contended that, based on the HSN Explanatory Notes to Heading 8517, the subject goods are used as parts or components of apparatus/devices that provide cellular or satellite network connectivity. It has further been observed that these goods, in their imported condition, are not capable of independently providing such connectivity and must be assembled with other components to form a complete apparatus or device capable of cellular network communication. Accordingly, the Commissionerate has concluded that the subje....