The Punjab Appellate Authority for Advance Rulings ( AAAR ) ruled that Roof mounted AC units for passenger coaches attracts 28% GST.
M/s ESS ESS KAY ENGINEERING Company Pvt Ltd, the appellant is engaged in the manufacturing of a “Roof Mounted Air Conditioner unit for Passenger Coaches of railways as per Research Design and Standard Organisation (RDSO) specification and drawing”.
The appellant filed an application for Advance Ruling with the Authority for Advance Ruling, Punjab (hereinafter referred to as, “AAR, Punjab”). The question for consideration was whether roof-mounted Air conditioning unit especially for use in railway coaches (manufactured as per railway design) should be classifiable under HSN- 8415 1090- IGST 28% or under HSN 8607 99 – IGST 18% as parts of Railway Coaches/ Locomotives.
The primary issue that emerges from the appeal filed by the appellant is regarding the classification of the roof-mounted Air conditioning unit. The Authority for Advance Ruling (AAR) Punjab, ruled that the Roof Mounted Air-Conditioning unit manufactured by the applicant is classifiable under HSN Heading 8415 and the classification of the goods shall not alter on account of supply by them to Railways.
The appellant submitted that classification of impugned goods may be done in terms of Note 3 to the Section XVII of the Customs Tariffs Act read with corresponding Explanatory notes of the HSN. The principle use of the goods manufactured is as per the design given by the Railways for exclusive use with the railway coaches only.
The appellant has further attacked the correctness of the order of AAR, Punjab by adopting the line of argument that the said authority has ignored Section Note 3 of Section XVII while dealing with the application.
The Two-Member Bench of Rajesh Puri, Chief Commissioner, IRS and Kamal Kishor Yadav, IAS, Commissioner of State Tax, Punjab observed that “We uphold the order issued by the Authority for Advance Ruling, Punjab and the appeal filed by the appellant M/s ESS ESS KAY ENGINEERING Company Pvt Ltd, stands dismissed on all counts and Roof Mounted Air-Conditioning unit manufactured by the appellant are classifiable under HSN Heading 8415.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
