5% VAT applicable to Centrifugal Monoblock Pumpset and Submersible Pumpset: AAR [Read Order]

The Authority for Clarification And Advanced Ruling, (ACAAR) Tamil Nadu on 22^nd May ,clarified that ‘Centrifugal and Monoblock submersible pumbsets’ for water handling are taxable @5% as per entry in Sl.No. 26(a) of part-B of the First Schedule to the TNVAT Act 2006.

Tvl  Aquasub Engineering ,a registered dealer based in Thodiyalur,Coimbatore had sought a clarification on the rate of tax on Centrifugal and Monoblock Submersible Pumbsets. The applicants stated that no specific horse power is specified under entry 26(a) of Part B of the first schedule to the TNVAT Act 2006.Therefore, all centrifugal and Monoblock submersible pumpsets irrespective of their horse power is to be taxed under the above entry. They have further stated that the entry 26(b) of part B of the First Schedule to the TNVAT Act 2006, do not make any distinction between Centrifugal and Monoblock pumpsets used for water handling and other pumbsets and therefore all pumpsets of 3HP and 5HP will be independently taxed at 5% under entry 26(b).

Entry 26 of part B of the First Schedule to the TNVAT Act 2006  reads as follows:

1. Centrifugal and Monoblock submersible pumbsets for water handling and parts thereof -5%(commodity code 2026)
2. Pumbsets of 3HP and 5 HP-5% (Commodity code 2026)

The ACAAR held that the entries in Sl.No.26(a) “Centrifugal and Monoblock Submersible pumbsets” in Part B of the First Schedule to the TNVAT Act 2006 does not specify the capacity of the pumbsets in terms of horsepower. Therefore, the Centrifugal and Monoblock submersible pumbsets of any horse power would fall under entry 26(a) of part-B of the First Schedule to the TNVAT Act 2006, and attract liability only at 4% during the period from 01.01.2007 to 11.07.2011 and 5% in the period after 12.07.2011 till date.