Electrical wiring harness used in Anti-skid Braking Systems classifiable under Heading 8544 with 28% rate of tax: AAR of Tamil Nadu      

Categories: Advance Ruling
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Fact: M/s. WABCO India Limited is engaged in manufacture of brake systems and related parts for heavy vehicles such as trucks, bus and other such commercial vehicles. The Electrical Wiring Harness is primarily an electrical wire with connectors at both ends and this product, manufactured by the applicant, is supplied to automobile manufacturers for applications in Anti-skid Braking Systems (ABS) in heavy vehicles. The Electrical Wiring Harness consists of Connectors & accessories, Wires & Cables, Tapes – Flame retardant (FR) grade for Wiring Harness applications, corrugated tubes – Flame retardant (FR) grade for Wiring Harness applications and are used to distribute the electrical energy from one point to another. The Applicant manufactures the wiring harness following the ISO standards prescribed for automobile industry.

Issue Involved: The applicant has sought advance ruling before the Tamil Nadu Authority for Advance Ruling (“AAR”) on the following matter:

1. Whether the Electrical Wiring Harness, -primarily an electrical wire with, connectors at both ends, manufactured by the Applicant falls under the HSN tariff item 8544 for which the rate prescribed vide Notification no 1/2017 -Central tax (Rate) dated 28 June 2017 read with 41/2017-Central tax (Rate) dated 14th November 2017 is 9%?

2. Whether the said rate of Central tax of 9% is applicable to the above product with effect from 1st July 2017?

 Held: The Hon’ble AAR of Tamil Nadu vide order no. 10/AAR/2018 dated September 27, 2018 stated as follows:

1. In regard to question no 1 the authority observed that the Electrical Wiring Harness set is falling under 85443000, Winding Wires, Coaxial cables and optical Fiber falls under Chapter Heading 854410, 854420 and 854470 respectively. Therefore, the product in question is covered under Sl. No. 161 of Schedule IV above of Notification No. l/2017-C.T.(Rate) dated June 28, 2017 and G.O. (Ms) No. 62 dated June 29, 2017 No. II(2)/CTR/532(d-4)/2017 and is subject to tax at the rate of 14% CGST and 14% SGST i.e. 28% tax. The said Notification is amended as per Notification No. 41/2017- C.T.(Rate) dated November 14,2017 and G.O. (Ms) No.157, dated November 14, 2017 by which the Entry at Sl. No. 161 of Schedule IV was omitted and the entry at Sl. No. 395 of Schedule III was modified as follows:

“Insulated (including enamelled or anodized) wire, cable (including co-axial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors”

These amendments were made effective from November 15, 2017. So, it is clear that the Electrical Wiring Harness manufactured by the Applicant, was subjected to tax @ 14% CGST and 14% SGST for the period from July 01, 2017 to November 14, 2017 and thereon, the tax rate is reduced to 9% CGST and 9% SGST.

2. In regards to question no 2 the authority observed that the rate of CGST and SGST at 9% each is applicable to the above product only with effect from November 15, 2017.

Citation: [2018] 98 taxmann.com 325 (AAR – TAMIL NADU)