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    Summary of AAR in Acrymold

    Sl. No

    GST-ARA-12/2017/B-15

    Name of

    Acrymold

    Ruling

     

    TMI Citation

    2018 (5) TMI 597 - AUTHORITY FOR ADVANCE RULINGS MAHARASHTRA

    AAR State

    MAHARASHTRA

    Macro Issue

    The issue is regarding classification of trophies and awards made of different material viz.

     

    Metal, Plastic, Glass, MDF/Wood, Resin etc and the questions raised before advance

     

    authority are as follows:

     

    1. If the word TROPHY is specifically mentioned under 83062920 (Article of Base Metal), So

     

    can all trophies made of any material be classified under this HSN?

     

    2. If different HSN codesare to allocated to trophies assembled of different material and if

     

    there is a combination of different materials and about 75% (value terms) is getting used of

     

    any one raw material, under which HSN code, they should be classified?

    Facts

    Applicant is engaged as an Importer, Manufacturer and Trader of Trophies and Gifts made

     

    of different material (including their combinations) viz. Metal, Plastic, Glass, MDF/Wood,

     

    Resin etc.

    Applicant

    As per the CBEC site and other official documents the above product is classified under the

    Stand

    HSN 83062920. The chapter no. 83 deals specifically with articles of BASE METAL. As

     

    Trophies and Awards are made of a variety of material namely METAL, PLASTIC, GLASS,

     

    MDF/WOOD, RESIN etc. There is no clear classification of the same under other chapters.

     

    As per Customs Classification, there is discrepancy of HSN allotted to these goods which

     

    are imported under different HSN code for this same product viz-a viz Mumbai, Kolkata &

     

    Delhi ports leading to variation in IGST rate for the same product.

    Department

    Question 1: If the word TROPHY is specifically mentioned under 83062920, So can we sell

    Stand

    all trophies made of any material under this HSN?

     

    Chapter 83 specifically deals with “Miscellaneous articles of base metal”. A base metal is a

     

    common and inexpensive metal, as opposed to a precious metal such as gold or silver.

     

    It includes trophies of base metals and not of any other material. The Tariff item 83062120

     

    covers “Trophies”. The mere mention of the word “trophies” would not mean that

     

    trophies of any material would be covered by the heading.

     

    Base metal articles containing two or more base metals are classified as articles of that

     

    metal which predominates by weight over each of the other metals, except where the

     

    headings otherwise require (e.g., copper- headed iron or steel nails are classified in

     

    heading 74.15 even if the copper is not the major constituent).

     

    The same rule applies to articles made partly of non-metals, provided that, under the General Interpretative Rules, the base metal gives them their essential character.

     

    The expression “base metals” means iron and steel, copper, nickel, aluminium, lead, zinc, tin, tungsten (wolfram), molybdenum, tantalum, magnesium, cobalt, bismuth, cadmium, titanium, zirconium, antimony, manganese, beryllium, chromium, germanium, vanadium, gallium, hafnium, indium, niobium (columbium), rhenium and thallium.

     

    Any reference to a base metal in Chapters 72 to 76 and 78 to 81 or elsewhere in the nomenclature also includes the alloys of that metal.

     

    Explanations:

     

    • Alloys of base metals with precious metals: These alloys are classified as base metals provided that no one of the precious metals (silver, gold and platinum) constitutes as much as 2% by weight of the alloy. Other alloys of base metals with precious metals are classified in Chapter 71.

     

    • Alloys of base metals: These alloys are classified with the metal which predominates by weight, with the exception of ferro-alloys (see the Explanatory Note to heading 72.02) and master alloys of copper (see the Explanatory Note to heading 74.05)

     

    • Alloys of base metals of this Section with non-metals or with the metals of heading

     

    28.05: These are classified as alloys of base metals of this Section provided the total weight of base metals of this Section equals or exceeds the total weight of the Other elements present. If this not the Case, the alloys are generally Classified in heading 38.24.

     

    Even though the word TROPHY is specifically mentioned under 83062920, all trophies made of any material cannot be classified under this HSN and are to be classified as per the below applicable provisions of the Customs Tariff Headings by applying the principal of specific over general

     

    Description of materials

     

    Description as per HSN

     

    HSN Code

     

    GST

     

     

     

     

    Rate

     

     

     

     

     

     

     

     

     

     

    For Glass Crystal Trophies & Awards

     

    Other

     

     

     

    70181090

    18%

     

    For Plastic Trophy and trophy parts

     

    Others

     

     

     

    39261019

    18%

     

     

     

     

     

     

     

     

     

     

    For Wooden Trophies & Frames

     

    W o o d e n

    f r a m e s

    f o r

    4414

    18%

     

     

     

    paintings,

    photographs,

     

     

     

    mirrors or similar objects

     

     

     

     

     

    For Metal Trophies & Awards

     

    Trophies

     

     

     

    83062920

     

     

     

     

     

    Others

     

     

     

    83062990

     

    12%

     

     

     

    Photograph,  picture

    or

    83063000

     

     

     

     

     

     

     

     

     

    similar frames

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    For Trophies made of pop and

     

    Articles  of

    Plaster

    or

    of

    6809

     

     

     

    other Resins

     

    compositions  based

    on

    18%

     

     

    plaster

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Other articles

     

     

    68099000

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Question 2: If different HSN codes are to allocated to trophies assembled of different material and if there is a combination of different materials and about 75% (value terms) is getting used of any one raw material, under which HSN code, they should be classified?

     

    The HSN Notes to Heading 8306 say thus -

    (B) Statuettes and Other ornaments

     

    This group comprises a wide range of ornaments of base metal (whether or not incorporating subsidiary non-metallic parts) of a kind designed essentially for decoration.

     

    The group covers articles which have no utility value but are wholly ornamental, and articles whose only usefulness is to contain or support other decorative articles or to add to their decorative effect.

     

    By application of rule 2(b) of General Rules for Interpretation of Tariff, goods which are classifiable under two or more headings, classification shall be effected as follows:

     

    • The heading which provides the most specific description shall be preferred to headings providing a more general description. 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.

     

    • Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable.

     

    • When goods cannot be classified by reference to (a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.

     

    Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin.

     

    Classification of Composite article: Articles of base metal (including articles of mixed materials treated as articles of base metal under the Interpretive Rules) containing two or more base metals are to be treated as articles of the base metal predominating by weight over each of the other metals.

     

    For this purpose:

     

    • iron and steel, or different kinds of iron or steel, are regarded as one and the same metal:

     

    • an alloy is regarded as being entirely composed of that metal as an alloy of which, by virtue of Note 5, it is classified; and

     

    • a cermet of heading 8113 is regarded as a single base metal.

     

     

    Ruling with

    Q1. If the word TROPHY is specifically mentioned under 83062920, So can all trophies

     

    reasons

     

    made of any material can be classified under this HSN?

     

     

     

     

     

     

    A1. Answered in the negative. Trophies made of other than base metal can be classified

     

     

     

    under those HSN Tariff headings that covers the respective material.

     

     

     

    Q.2 If different code is allocated to trophies assembled of different material, I would like

     

     

     

    to know if there is a combination of different materials and about 75% (value terms) is

     

     

     

    getting used of any one Raw Material, under which HSN should we make bill?

     

     

     

    A2. The question is of a general nature. In absence of the needful information as to the

     

     

     

    constituent materials of the trophies, the question was not answered.

     

     

     

     

    Discussion

    1.  The decision clarifies the legal position that though there is a specific word ‘Trophy’

     

    Outcome

    under 83062920, the said classification can only be adopted in case the trophy is

     

     

     

    made of base metals as the respective chapter covers articles of base metals.

     

     

     

    2.  In case of trophy made of material different from that of base metal, then such trophy

     

     

     

    cannot be classified under 83062920. They should be classified under the Tariff

     

     

     

    headings (as listed above) that covers the respective material.

     

     

     

    3.  In case of trophies made by using two or more material, the AAR has not conclusively

     

     

     

    answered the question on the reasoning that the question involved is a general one.

     

     

     

    However, it was mentioned that classification in such cases can be adopted on the

     

     

     

    basis of General Rules for Interpretation of Tariff.

     

     

     

    4.  According to Rule 3(b) of General Rules for Interpretation of Tariff, in case of goods

     

     

     

    made of different material, then they shall be classified as if they consisted of the

     

     

     

    material or component which gives them their essential character. Thus, if a trophy is

     

     

     

    made of base metal (bronze) with wooden base, then it can be said that trophy is

     

     

     

    made of two or more materials. Out of which, base metal (bronze) will be the

     

     

     

    essential character as the trophy is still considered as made bronze. In such case, the

     

     

     

    said shall be classified as if it is made of base metal (bronze) alone under 830629290.

     

     

     

     

     

     

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