TaxTMI 
TaxTMI 
2026 (3) TMI 1035
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....IYA, 173, LAXMI NAGAR, NIWARU ROAD, JAIPUR-302012, Rajasthan (hereinafter "the applicant") is fit to pronounce advance ruling as they have deposited prescribed Fee under CGST Act and it falls under the ambit of the Section 97(2)given as under: A. SUBMISSION OF THE APPLICANT (in brief):- Brief facts of the case: 1. The applicant Arti Pitaliya (M/s. Shree Rubber & Polymers) (here in after referred to as 'Applicant') has sought an Advance Ruling on the Entry No. 195B of Schedule Il of notification no 01/2017 dated 28.06.2017 as inserted vide notification no 06/2018 dated 25.01.2018 i.e. classification of rubber ring specifically and only used in sprinkler irrigation system or drip irrigation system. 2. The applicant seeks advance ruling over the coverage of various items used in the sprinklers and drip irrigation systems sold individually as well as part of a complete system. 3. The applicant is engaged in manufacturing and trading of various plastic and metallic items which are used in agricultural irrigation. These items are rubber rings etc. All these items are used as part of sprinkler or Drip irrigation system depending upon the requirement of each farmer. These it....
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....rinkler system as a part to be used in their sprinkler/ drip irrigation system. 9. That PRESS RELEASE on GST Rate on goods as recommended by the GST Council in its 37th Meeting held on 20.09.2019 stated that-all "mechanical sprayers" falling under HS Code 8424 would attract 12% GST. 10. That Entry No. 195B of Schedule II of Notification no. 01/2017 dated 28.06.2017 as inserted vide notification no.: 06/2018 dated 25.01.2018 covers vide Chapter/Heading/Sub-Heading/Tariff item 8424 (Sprinklers; drip irrigation system including Laterals) having overall GST @ 12%. 11. That Circular number 81/55/2018-GST dated 31st December, 2018 has been issued as a clarification regarding GST tax rate for Sprinkler and Drip irrigation system including laterals and vide sr. no. 4 of the circular it has been stated: "Therefore, the term "Sprinkler", in the said entry 195B, covers sprinkler irrigation system. Accordingly, sprinkler system consisting of nozzles, lateral and other components would attract 12% GST rate. 12. That in circular no. 81 has been stated that lateral and other components would attract 12% GST rate. The HS Code 84249000 covers parts in the ambit of tariff item 8424. 1....
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....ds CGST rate (1) (2) (3) (4) 195A* 8424 Nozzles for drip irrigation equipment or nozzles for 6% 195B ** 8424 Sprinklers; drip irrigation system including laterals; mechanical sprayers"; 6% Schedulell-6% * Inserted by Noti. No. 27/2017 Central Tax (Rate) dated 22.09.2017. **- Inserted by Noti. No. 06/2018 Central Tax (Rate) dated 25-01-2018. Schedule III-9% S.No. Chapter/Heading/Sub-heading/Tariff item Description of Goods CGST rate (1) (2) (3) (4) 195A* 8424 Nozzles for drip irrigation equipment or nozzles for 6% 195B ** 8424 Sprinklers; drip irrigation system including laterals; mechanical sprayers"; 6% *** Amended vide notification no 27/2017 Central Tax (Rate) dated 22.09.2017 and 06/2018 Central Tax (Rate) dated 25-01-2018 1. That till 22.09.2017 all the items listed under tariff heading 8424 were taxable @18% (9% CGST + 9% SGST) vide entry no 345 of schedule III of notification no 01/2017. 2. That vide notification no 27/2017 dated 22.09.2017 nozzles of the sprinklers and the drip irrigation system were carved out of this entry no 345 of schedule ....
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....rrigation system and are helping in overall functioning of the system. It is submitted that they are not to be used independently anywhere and further they are part of the system without which whole system may not work. Thus they are laterals. 11. That Circular No. 155/11/2021-GST dated 17.06.2021 clarified regarding GST rate on laterals/ parts of Sprinkler s or Drip Irrigation System. 12. That it is clarified that intention of the Entry 195B of Schedule II of Notification no. 01/2017 dated 28.06.2017 as inserted vide notification no. : 06/2018 dated 25.01.2018 covers vide Chapter/Heading/Sub-Heading/Tariff item 8424 (Sprinklers; drip irrigation system including Laterals) has been to cover laterals (pipes to be used solely with sprinklers/drip irrigation system) and such parts that are suitable for use solely or principally with ' sprinklers or drip irrigation system', as classifiable under heading 8424 as per Note 2(b) to Section XVI to the HSN. Hence, laterals/ parts to be used solely or principally with sprinklers or drip irrigation system, which are classifiable under heading 8424, would attract a GST of 12%, even if supplied separately. 13. That later vide notificatio....
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.... shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. 21. That from the perusal of the above said rule, it can be inferred that more specific description will always prevail over the general description. 22. That while going through Entry No. 195B of Schedule II of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 read with Circular No. 81/55/2018-GST, dated 31-12-2018, and Circular No. 155/11/2021-GST dated 17.06.2021 and after applying rules of interpretations, it is submitted that the Sprinkler Irrigation System including laterals only will be covered under the said Notification and attract GST at the rate of 12 per cent. 23. That as per 56th council meeting, GST rate of HSN 8424 i.e. Sprinklers; drip irrigation system including laterals; mechanical sprayers has been reduced from 12% to 5% with effec....
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.... as sprinkler/drip irrigation system seals (spares/with system) Figure 3: Rubber ring manufacturing flow (compiled from process video and flow chart). Step Activity (what happens) Supporting photo (from video) Step 1 Raw materials & additives Receipt of rubber base and compounding ingredients (fillers, process oil, curing agents, accelerators, pigments etc.) as per formulation. Materials are staged for batching. Photo: Raw materials & additives Oil Chemicals Filler Like Calcium or China Clay Step 2 Compounding / Mixing Ingredients are mixed to obtain a homogeneous rubber compound with the required elasticity, hardness and sealing performance. (Mixing stage may happen in an internal mixer/compounder; the video shows pre-mixing material staging.) Mixing process for make rubber compound Step 3 Sheeting on two-roll mill The compounded rubber is sheeted on a two-roll mill to obtain uniform thickness and workable sheets for mould loading. Photo: Sheeting on two-roll mill Step 4 Cutting into preforms (strips) Rubber sheets are cut/weighted into preforms (strips) suitable for each mould cavity to ensure consistent ring dimensions.....
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....plies where a rubber article is not identifiable as a part suitable for use solely/principally with a particular machine/system under Section XVI. In the present case, the rubber rings are not 'general use' rubber gaskets; they are application-specific parts, supplied and used only in sprinkler/drip irrigation systems. The CBIC clarification also distinguishes 'parts of general use' (classifiable elsewhere) from parts suitable for use solely/principally with sprinklers/drip irrigation systems (classifiable under 8424). 4.5 Supporting precedent - Advance Ruling in the case of Kriti Industries (India) Ltd. In Kriti Industries (India) Ltd., the Authority discussed Entry 195B, Circular No. 81/55/2018-GST and Circular No. 155/11/2021-GST, and held that sprinklers/drip irrigation system including laterals and parts used solely or principally with such systems are classifiable under heading 8424 and attract the rate applicable to Entry 195B, even if supplied separately (subject to the 'general use parts' exception). C. QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT: Q-Whether parts of sprinkler system or drip irrigation system sold by us like the rubber rings etc. exclusiv....
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....The parts of sprinkler system or drip irrigation system such as rubber rings etc., exclusively meant for use in sprinklers and drip irrigation systems but sold in isolation as parts and not as a complete system, are not classifiable under heading 8424. Instead, they are classifiable under heading 4016 and attract GST at the rate of 18% (9% CGST +9% SGST). This classification applies because, as per Note 1(g) to Section XVI of the Customs Tariff (which covers machinery and mechanical appliances under Chapter 84, including HSN 8424), articles of Chapter 40 (rubber and articles thereof) are specifically excluded from Section XVI. The rubber rings in question are article of vulcanized rubber falling squarely under Chapter 40, regardless of their exclusive design or use in irrigation systems. They do not qualify of the concessional rate under Entry No. 195B of Schedule Il to Notification no. 01/2017-Centeral Tax (Rate) dated 28.06.2017 (as amended), which covers sprinklers and drip irrigation systems (including laterals) at 5% GST but does not extend to such rubber components when supplied separately. Proceedings Pending: As per available records, no proceedings are pending agains....
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....arified as under: i. "The intention of the said entry has been to cover laterals (pipes to be used solely with sprinklers/drip irrigation system) and such parts that are suitable for use solely or principally with 'sprinklers or drip irrigation system', as classifiable under heading 8424 as per Note 2(b) to Section XVI of the HSN. Hence, laterals/parts to be used solely or principally with sprinklers or drip irrigation system, which are classifiable under heading 8424, would attract GST of 12%, even if supplied separately. However, any part of general use, which gets classified in a heading other than 8424, in terms of section Note and Chapter notes to HSN, shall attract GST as applicable to the respective heading." 7. Thus, if the rubber rings are articles of hard rubber and are established to be parts suitable for use solely or principally with a specific system classifiable under heading 8424, they may be classifiable under heading 8424 and attract the concessional rate applicable thereto. Conversely, if such goods are of general use and not confined to sole or principal use with a specific system, they would not qualify for classification under heading 8424 and woul....