AAR (Maharashtra) Settles Turbochargers' Exemption Status, Regardless of On-Highway or Off-Highway Context
The Maharashtra bench of the Authority for Advance Rulings has ruled that imported turbochargers cannot be classified based
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AAR (Maharashtra) Settles Turbochargers' Exemption Status, Regardless of On-Highway or Off-Highway Context The Maharashtra bench of the Authority for Advance Rulings (AAR) has ruled that imported turbochargers cannot be classified based on their use in on-highway or off-highway vehicles to avail benefits under Sr. No. 448H of Notification No. 50/2017 dated June 30, 2017. Garrett...
AAR (Maharashtra) Settles Turbochargers' Exemption Status, Regardless of On-Highway or Off-Highway Context
The Maharashtra bench of the Authority for Advance Rulings (AAR) has ruled that imported turbochargers cannot be classified based on their use in on-highway or off-highway vehicles to avail benefits under Sr. No. 448H of Notification No. 50/2017 dated June 30, 2017.
Garrett Motion Technologies (India) Pvt. Ltd., a company that imports and trades turbochargers suitable for both on-highway and off-highway applications, sought clarification from the AAR regarding their eligibility for exemption benefits under Sl. No. 448H of Notification No. 50/17-Cus. dated June 30, 2017, for the import of turbochargers (classified under Tariff Item 8414 80 30), specifically those suitable for use only in off-highway equipment.
The sole member of the bench, Samar Nanda, observed that the term 'Off-Highway equipment' encompasses a broad spectrum of machinery primarily designed for off-road purposes, ranging from large mining trucks to small agricultural machines. After conducting a thorough analysis of CTH 8418 in the tariff and Sr. No. 448H in the mentioned notification, it becomes evident that neither the terms 'On-highway' nor 'Off-highway' goods are explicitly mentioned, and there is no differentiation made for turbochargers classified under CTH 8414 80 30 based on their intended use. Consequently, according to the tariff, it is evident that turbochargers, regardless of whether they are intended for on-highway or off-highway use, fall under CTH 8414 80 30.
The Bench also noted that Sr. No. 448H of Notification No. 50/2017 dated June 30, 2017, expressly specifies that turbochargers are eligible for a reduced duty rate of 7.5 per cent, as opposed to the standard 15 per cent rate. This reduced rate applies, however, on the condition that these turbochargers are not used in motor vehicles, including cars, and cycles, falling under headings 8702, 8704, 8703, and 8711.
Therefore, the AAR bench concluded that the imported turbochargers should not be classified based on whether they are intended for use in on-highway or off-highway vehicles to qualify for the benefits outlined in the notification. As per the notification's stipulations, turbochargers will only be eligible for the benefits under the notification if they are deemed suitable for use in commodities other than motor vehicles, including cars and cycles falling under headings 8702, 8703, 8704, and 8711.