Manually Operated Domestic Grinding Machine Is Taxable at the Rate of 5%

DEPARTMENT OF COMMERCIAL TAXES, KERALA PROCEEDINGS OF THE AUTHORITY FOR CLARIFICATION U/s.94 OF THE KERALA VALUE ADDED TAX ACT, 2003.

Members present are:

1. T.V. Kamala Bai. Joint Commissioner (Law), Office of the Commissioner of Commercial Taxes, Thiruvananthapuram.

2. Suchala Kumar. S.K. Joint Commissioner (General), Office of the Commissioner of Commercial Taxes, Thiruvananthapuram.

3. C. Lalappan. Joint Commissioner (Audit & Inspection), Office of the Commissioner of Commercial Taxes, Thiruvananthapuram.

Sub : KVAT Act, 2003 – Clarification U/s 94 – Rate of tax of Manually operated Domestic Grinding Machine – Orders issued.

Read :Application from Sri. P.T. Thomas, M/s. Malabar Rubber Products, Kannur dtd. 23/3/2012.

ORDER No.C3/10176/12/CT DATED 19/8/2013. 1. Sri. P.T. Thomas, M/s. Malabar Rubber Products, Kannur has preferred an application U/s 94 of the Kerala Value Added Tax Act, 2003 seeking clarification on the rate of tax of the commodity Manually operated Domestic Grinding Machine. 2. The applicant is borne on the rolls of the Office of the Commercial Tax Officer, Kuthuparamba, and is engaged in the sale of Domestic Grinding Machine. The applicant purchases the commodity from Jalandhar. The applicant would contend that the commodity is a hand operated grinder used for crushing and powdering food grains. Grinding is done with the help of two grinding wheels. But the assessing authority has classified the commodity as electrical domestic appliance falling under Entry 32 of the S.R.O. No. 82/2006. The applicant would contend that machinery of all kinds would fall under Entry 83 of the Third Schedule to the Kerala Value Added Tax Act, 2003 and sub-entries 29, 30 and 31 thereto specifically deals with grinders. 3. The applicant has requested to clarify the rate of tax of the commodity. 4. The applicant was heard in the matter and the contentions raised were examined. 5. Sub-entries 29,30 & 31 of Entry 83 of the Third Schedule reads:

83 Machinery of all kinds (other than those specifically mentioned in this schedule or in any other schedule)

(29) Grinding machine with a flat surface in which the positioning in any one of the axis can be set up to an accuracy at least 0.01mm (a) numerically controlled 8460.11.00 (b) other 8460.19.00

(30) Other Grinding machines with a flat surface in which the positioning in any one of the axis can be set up to an accuracy at least 0.01mm (a) numerically controlled 8460.21.00 (b) other 8460.29

(31) Grinder, tool/cutter 8460.39.10

6. The HSN Code appearing in the above said entries is 8460. The Description of goods with respect to Tariff Item 8460 of the Customs Tariff Act reads 8460 MACHINE-TOOLS FOR DEBURRING, SHARPENING, GRINDING, HONING, LAPPING, POLISHING OR OTHERWISE FINISHING METAL, OR CERMETS BY MEANS OF GRINDING STONES, ABRASIVES OR POLISHING PRODUCTS, OTHER THAN GEAR CUTTING, GEAR GRINDING OR GEAR FINISHING MACHINES OF HEADING 8461. The said HSN Code is related to machine-tools which are used for working of metals or cermets. As such the commodity Domestic Grinding Machine will not come under this HSN Code and hence it cannot be included in sub-entries 29,30 & 31 of Entry 83 of the Third Schedule. 7.The assessing authority has classified the commodity as taxable at RNR by virtue of Entry 32(1) of S.R.O. No. 82/2006 which reads: 32 Electrical domestic and commercial appliances other than those specifically included under any other entry in this List or in any other schedules.

(1) Food grinders and mixers; Fruit or vegetable juice extractors

(a) Food grinders 8509.40.10 (b) Other 8509.40.90

8. The HSN Code appearing in the above said entries is 8509. The Description of goods with respect to Tariff Item 8509 of the Customs Tariff Act reads 8509 ELECTRO-MECHANICAL DOMESTIC APPLIANCES, WITH SELF CONTAINED ELECTRIC MOTOR, OTHER THAN VACUUM CLEANERS OF HEADING 8508. But the commodity Domestic Grinding Machine is a hand-operated device i.e. it is not seen operated with the help of electricity. As such, it cannot be classified under Entry 32(1) of S.R.O. No. 82/2006. 9. The commodity cannot be classified under Entry 83(10) i.e. Flour mill machinery with HSN 8437.80.10 and Entry 83(11) i.e. Rice mill machinery with HSN Code 8437.80.20 of the Third Schedule to the Act since the Customs Tariff Item 8437 covers machines which are used in milling industry.

10. Another entry to be examined in this regard is Entry 83(55)(g)(ii) of the Third Schedule which is extracted hereunder: 83 Machinery of all kinds (other than those specifically mentioned in this schedule or in any other schedule) (55) Machines and mechanical appliances having individual functions, not specified or included elsewhere

(g) Other machines and mechanical appliances

(ii) Mixing, kneading, crushing, grinding, screening, sifting, homogenising, emulsifying or stirring machines 8479.82.00

11. The Customs Tariff Act Entry with respect to Tariff Item 8479.82.00 is extracted hereunder: 8479 MACHINES AND MECHANICAL APPLIANCES HAVING INDIVIDUAL FUNCTIONS, NOT SPECIFIED OR INCLUDED ELSEWHERE IN THIS CHAPTER

8479 10 00 - Machinery for public works, building or the like 8479 20 - Machinery for the extraction or preparation of animal or fixed vegetable fats or oils : 8479 20 10 --- Oil-seed crushing or grinding machinery including purifying tanks 8479 20 90 --- Other 8479 30 00 - Presses for the manufacture of particle board or fibre building board of wood or other ligneous materials and other machinery for treating wood or cork 8479 40 00 - Rope or cable-making machines 8479 50 00 - Industrial robots, not elsewhere specified or included 8479 60 00 - Evaporative air coolers - Other machines and mechanical appliances: 8479 81 00 -- For treating metal, including electric wire coil-winders 8479 82 00 -- Mixing, kneading, crushing, grinding, screening, sifting, homogenising, emulsifying or stirring machines

12. The commodity Manually operated Domestic Grinding Machine would fall under the HSN Code 8479.82.00 and hence would be taxable at the rate of 5% by virtue of Entry 83(55)(g)(ii) of the Third Schedule to the Kerala Value Added Tax Act, 2003. The issues raised above are clarified accordingly.

T.V. Kamala Bai Suchala Kumar. S.K C. Lalappan Joint Commissioner (Law) Joint Commissioner (General) Joint Commissioner (A&I)

To,

Sri. P.T. Thomas, M/s. Malabar Rubber Products, Peediyekkal House, Malayampadi P.O., Kannur.