Supply Of U-Bolt And Front Spring Bolt Made Up Of Steel Attracts 18% GST: AAR

The applicant is in the business of manufacturing and supplying goods such as nuts, bolts, and springs, etc., and the application for advance ruling relates to the classification of U-bolt, Front Spring Bolt, and Spring Pin.

The applicant submitted that an U-bolt is an industrial fastener in the shape of the letter U with two threaded arms (or legs) extending from a curved base. U bolts are typically used in mountings or to provide support where the "u" shape keeps it firmly in place, adding stability to the support. U-bolts are generally used as framing fasteners and anchors for foundations and roofs, pipe and conduit holders, and bolts for motor and engine shaft components.

The front spring bolt is a type of fastener which is used with a nut to fasten two or more goods together. It is a screw-like metal object without a point and is commonly known as a nut and bolt. Front spring bolts are available in different sizes and are used in various industries such as construction, automobiles, agriculture, etc.

A spring pin is a mechanical fastener that secures the position of two or more parts of a machine relative to each other. The spring action of the pin allows it to compress as it assumes the diameter of the hole. The force exerted by the pin against the hole wall retains it in the hole. Therefore, a spring pin is considered a self retaining fastener. Spring pins may be used to retain one shaft to another or to precisely fasten flat faces of mating parts together through symmetric hole locations.

As the HSN explanatory notes to CTH 7318 specifically state that CTH 7318 includes U Bolt, the AAR noted that any goods of base metals for general use shall be classified with the respective base metals group and not in the group of functionality.

"The heading includes all types of fastening bolts and metal screws regardless of shape and use, including U-bolts, bolt ends (i.e., cylindrical rods threaded at one end), screw studs (i.e., short rods threaded at both ends), and screw studding (i.e., rods threaded throughout), and we find that, as per the HSN explanatory notes, U-bolts, which are made of steel, are a type of bolt which is specifically covered under the CTH 7318. Therefore, we hold that these are classifiable under the CTH 7318," the AAR said.

The AAR observed that the applicant's spring pins are made of various types of steel and have the appearance of springs. As a result, covered under the subheading "Other," by the CTH 7320, which aptly covers iron or steel springs and leaves for springs.

"We observe that since in the commercial parlance the goods in question are known as nuts and bolts, namely U-bolt, Front Spring Bolt, and Spring Pin, and not by any other name and as held by the Hon'ble Supreme Court that the classification of goods is to be determined by a commercial identity test and not by a functional test, i.e., as to how they are referred to in the market by those who deal with them, be it for the purpose of selling, purchasing, or otherwise, they are to be classified as a generic product. Hence, we are of the view that if the generic goods, as known in commercial parlance, find specific mention in a particular tariff head and are also not covered in exclusion clause in any chapter note, the classification of goods has to be determined by a commercial identity test and not by a functional test," the AAR added.

Applicant's Name: Ultra Tech Suspension Private Limited

Citation: Advance Ruling 04/2022-23

Dated: 27.04.2022

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