Maharashtra AAR What is the appropriate classification and rate of GST on the supply of such “Hydraulic Kit” cleared to dealers / distributors or OEMs cleared as such, which comprises of the Hydraulic cylinder and wet kit (with or without pump).
MAHARASHTRA AUTHORITY FOR ADVANCE RULING
BEFORE THE BENCH OF
Shri. B. Timothy Add Commissioner of Central Tax Member
Shri. B.V Borhadwe joint Commissioner of State Tax
|GSTIN or User Id||29AAACH2006 C1ZD|
|Legal Name of Applicant||M/s Hyva India Pvt. Ltd|
|Registered Address / Address Provided While obtaining user id||Pilot No. El-215 MIDC Mahape Navi Mumbai 400701|
|Details of Application||GST-ARA Application No. 96 Dated 30.11.2018|
|Concerned Officer||Asst Commissioner CGST & CX Division IV Belapur|
|Nature of Activity Proposed present in respect of which advance ruling sought|
|Description In brief||That Applicant is engaged in the manufacture of Hydraulice kitswhich is used withe other tipping parts to lift the body of a track|
|Issue On Which advance ruling required||Classification of goods or service or both
Determination of the liability to pay tax on any good and service or both
|Question on which advance ruling required||As reproduced in para 01 of the proceeding below|
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by M/s. Hyva India Pvt. Ltd., the applicant, seeking an advance ruling in respect of the following questions :-
a. What is the appropriate classification and tax rate applicable on the supply of –
“Hydraulic Kits” supplied to dealers / distributors or body builders as such from the factory of applicant, under Central Goods and Service Tax Act, 2017 (CGST).
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the “GST Act”.
02. FACTS AND CONTENTION — AS PER THE APPLICANT
“STATEMENT OF RELEVANT FACTS HAVING A BEARING ON THE QUESTION(S) ON WHICH ADVANCE RULING IS REQUIRED.
1. M/s Hyva India Pvt. Ltd. (‘Applicant’) having its corporate head office at EL-215, Mahape, Navi Mumbai – 400710 and having various manufacturing units across the country, is engaged in the manufacture and supply of hydraulic kits, tippers, compactors, cranes, tail lifts, hook loaders, control valves etc.
2. The present application is filed in respect of one of the products namely “Hydraulic Kit”. Hydraulic Kit is a combination of various items including Hydraulic front end cylinder, Gasket, washers, MTG Kit valves, hose, pipes, Oil tanks, cables, etc. along with other parts which are used for the fixing / mounting on a motor vehicle chassis. The hydraulic kit is of a kind used to fixed on a motor vehicle chassis can be used to lift the body of truck, tipper, etc. Further, the “Hydraulic Kit” is used in bodies/platform, detaching sides, tipper bodies falling under Chapter Heading No. 87.09 as well as for other trailers for transport of goods such as agricultural, public works etc., trailer (whether or not tipper) falling under Heading No.87.16. All the aforesaid items of Hydraulic. Kit (except Hydraulic cylinder and Valve which are manufactured by the applicant) are commonly known as “wet kit” by the applicant. The front-end hydraulics are the best choice for front-end tippers and tipping trailers.
3. All the items of wet kit except Valve, are purchased and received from various vendors and are classified under different headings of the Customs Tariff which is adopted for the specification of GST rates in the notification issued under the CGST Act. The applicant supplies the “Hydraulic ‘t” which comprise of Hydraulic cylinder along with wet kit”. The Hydraulic cylinder and Valve are manufactured by the applicant at its factory/workshop duly registered under GST law. It is submitted that bulk packs of wet kit parts are received from various vendors. The applicant is then undertaking the activity of repacking of wet kit items in sets from the bulk pack to small pack. It means all the parts of Hydraulic kit complete in itself are dispatched in loose sets. Thus, the Hydraulic system in unassembled form are supplied by the applicant from its premises comprising of Hydraulic cylinder, wet kits in loose forms.
4. It is to be noted that Hydraulic Kit (cylinder + wet kit) when fitted on the chassis of motor vehicle delivers higher transport efficiency and safer operating at lower cost in the Construction, Transportation and Mining market segments.
5. It is observed by the applicant that there is an ambiguity prevailing in respect of the classification of “Hydraulic Kit” under GST laws for the purpose of determination of rate of tax.
6. Hydraulic Kit is supplied in two modes:
(i) Supply to dealers / distributors / body builders:
(ii) Supply to OEMs (namely Tata Motors, Eicher Motors, etc) alongwith body fitted on the chassis received from OEMs.
7. The dealers / distributors who purchase the Hydrulic Kit from the applicant, further sell the Hydraulic Kit to end customers; whereas body builder to whom the applicant sells the Hydraulic Kit uses the Hydraulic Kit in its factory/premises, to be fitted on the chassis of the vehicle. In some case, the Hydraulic Kit is cleared with or without pump to the dealers / distributors or OEMS
8. In case of sale of Hydraulic Kits to OEMs, the applicant receives chassis from the OEMs for fitting of body along with Hydraulic kit. In such cases, applicant supplies the body with Hydraulic Kit as a complete product/solution to the customers (OEMs) and clears the resultant product i.e. Body + Hydraulic Kit under Chapter Heading No.87.07 of the First Schedule of the Customs Tariff Act attracting GST @28%. In some instances, the applicant also clears/supplies the body alone to the OEMs under Chapter Heading No.87.07 of the First Schedule of the Customs. Tariff Act attracting GST @28%.
9. In the present application, the applicant is seeking the clarification regarding the correct classification of Hydraulic Kit supplied to Dealers / Distributors or body builders as such from the factory of the applicant.
10. As per the understanding of the applicant, there is an ambiguity regarding the correct classification of Hydraulic kit’ supplied as such to dealers / distributors or body builders cleared as such, as it comprises of multiple parts classifiable under various Tariff Headings, whereas, the Chapter Heading No 84.12 of the Customs Tariff covers “Hydraulic Systems” within its purview.
11. Chapter Heading No. 84.12 of the Customs Tariff covers ‘Other Engines and Machines’. This Chapter covers ‘Hydraulic Power Engines and Motors’.
c) They must not be more specifically included else where in the nomenclature.
In the present case, the Hydraulic Kit is used on bodies/ platform, detaching sides, tipper bodies falling under Chapter Heading No.8709 as well as for other trailers for transport of goods such as agricultural, public works etc., trailer (whether or not tipper) falling under Heading No.8716. Thus, it is clear that the product in question i.e. Hydraulic Kit is not satisfying the condition No.(b) mentioned in above. In other words, Hydraulic Kit is not suitable for use solely or principally with the motor vehicles.
Further, we are in agreement with the applicant’s submission that the Hydraulic Kit is specifically excluded by Note 2(e) to Section 17 which provides that the expression “parts” and “parts and accessories” do not apply to machines or apparatus of heading 8401 to 8479 or parts thereof other than radiators or articles of Section 8481 or 8482 or provide constituting integral parts for engines or articles of Heading 8483, whether or not they are identifiable as goods as per the goods of this section. In the present case, the product in question ‘hydraulic cylinders/hydraulic kits’ is squarely/specifically covered under Heading No.84.12 and hence the condition (a) mentioned above stands not satisfied in the present case.
As discussed above, it is clear that Hydraulic Kit is more specifically included in Heading No.84.12 and is more specifically covered under said heading. Thus, the Hydraulic Kit does not satisfy the condition (c) Mentioned above.
Therefore, we clearly find that all the 3 conditions mentioned in Heading No.8708, 8714 and 8716 are not satisfied in the present case and hence, the product in question i.e. Hydraulic Kit will not be covered under Headings No. 8708, 8714 and 8716.
In view of the foregoing the hydraulic kits are appropriately classifiable under heading 8412 by application of HSN Explanatory Notes to headings 8412, 8708, 8714 and 8716 and Section Note 4 to Section XVI and Exclusion Note 2 to Section XVII.
06. In view of the extensive deliberations as held herein above, we pass the order as follows:
(under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
NO. GST-ARA- 96/2018-19/B-20
Mumbai, dt. 18/02/2019
Question :- What is the appropriate classification and rate of GST on the supply of such “Hydraulic Kit” cleared to dealers / distributors or OEMs cleared as such, which comprises of the Hydraulic cylinder and wet kit (with or without pump).
Answer :- Hydraulic Kits are appropriately classifiable as ‘other engines and motors’ under heading 8412 and the rate of GST would as applicable to that heading in the Schedule at the relevant time.
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