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M/s Prag Polymers (‘the Applicant’), engaged in the manufacture and supply of railway Locomotives parts had sought an advance ruling before the UP AAR to ascertain the classification of Switch Board Cabinet. The Applicant had submitted that the Switch Board Cabinets were manufactured by them specifically on the basis of drawings and designs approved by the Railways. Further, such goods are not viable for use elsewhere. Accordingly, the Applicant opined that the such goods were appropriately classifiable under HSN 8607 chargeable to 12% GST.
The AAR observed that HSN 8607 categorically covers parts of railways, tramways, etc. However, the said heading does not cover switch boards. It was further observed that HSN 8537 clearly includes cabinets for electric control and distribution of electricity. It had also been observed that Note 2(f) to Section XVII inter alia provides that parts and parts and accessories of electrical machinery of Chapter 85 do not apply to HSN 8607 whether or not they are identifiable as goods of Section XVII (Railways).
The AAR further observed that the CBIC vide Circular No. 30/4/2018 – GST dated 25 January 2018 had clarified that goods, falling under any chapter other than 86, would attract the general applicable rate of 18% GST even if supplied to the Railways. It was also observed Entry 8607 is very restrictive entry for the purposes of consideration of goods to be classifiable as parts of railway bogies to avail the benefit of reduced rate of taxes.
Basis the above observations, the AAR held that the switch board cabinet, though to be used in Railway coaches, cannot be called as parts of railway bogies under Chapter Headings 8607 of the Tariff, as a specific HSN is available for the same. Accordingly, it was ruled that switch board cabinets merit classification under HSN 8537 chargeable to 18% GST.
Prag Polymers [Advance Ruling No. UP ADRG 75/2021 dated 19 March 2021]
The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.
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