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Geared Motor combination of gear box & electric motor classified under heading 8501, GST @18% applicable

April 8, 2019[2019] 104 taxmann.com 124 (AAR - MAHARASHTRA)
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GST : 'Geared motors' being a combination of machines that is electric motors and gear box intended to contribute together a cleared defined function to run industrial machineries with speed controlling mechanism, is appropriately classifiable in Heading 8501

• The applicant was a supplier, exporter and manufacturer of various industrial products mainly specialized in manufacturing geared boxes, geared motors, fluid couplings, etc. One of the product 'Geared Motor', manufactured by applicant was a combination of gear box and electric motors. The product Gear Box was classified under the HSN Code 8483, Electric Motors were classified under the HSN Code 8501. However, the product Geared Motor was not specifically classified under any of the HSN Codes. The applicant was classifying the product under the HSN Code 8483 and both the products (Gear Box and Electric motor) combined to form Geared motor were dutiable at the rate 12.5%.

• In recent decision of Gujarat Authority of Advance Ruling, in respect of a similar matter, it had been held that the product 'Geared Motor' would be classified under the HSN Code 8501. The HSN Codes 8483 and 8501 were taxable at the rate 28 percent and 18percent respectively under the GST legislation. The applicant had sought to classify 'Geared Motor' being supplied under HSN 8501 basis the nature of the product, after considering relevant chapter notes, section notes of the Customs Tariff Act, 1975, explanatory notes to Harmonized System of Nomenclature (HSN) issued by World Trade Organization and recent decision of Gujarat Authority of Advance Ruling on impugned product.

• The 'Geared Motors' being a combination of machines that is Electric Motors and Gear Box intended to contribute together a cleared defined function to run industrial machineries with speed controlling mechanism, the Geared Motor is appropriately classifiable in the heading 8501.

• However, the jurisdictional officer has different view. He submits that Geared Motor is a machine consisting of two individual components interconnected. His view is that electrical motors when attached to Gear Box will no longer remain an electrical motor but a geared motor with altogether a different function that is transmission of mechanical power and speed from one shaft to another. Though the contention of the jurisdictional officer appears convincing, in view of the exclusion note under chapter heading 8483 and inclusive note to 8501, it would be against the scheme of HSN to agree with the jurisdictional officer's view. Thus, 'Geared Motors' supplied by the applicant fall under Tariff Head 8501.

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