CBIC Issues Clarification Regarding Classification Of Goods Referred As Truck Cranes or All Terrain Cranes

The Central Board of Indirect Taxes and Customs (CBIC) has issued a clarification regarding the classification of the goods referred to as truck cranes or all-terrain cranes.

Truck cranes, or all-terrain cranes, are essentially used for handling and lifting heavy loads and have mobility as a function.

Truck cranes, or all terrain cranes, come in various types and sizes, depending on the requirements of the users and factors such as the load to be handled, the terrain where it is put to use, etc. A simple generic description such as "All Terrain Cranes" would thus represent a large category of similar goods.

However, some of the basic features are common to goods. Firstly, the primary purpose of the goods is not the transport of people or goods. Secondly, this is equipment designed to lift extremely heavy loads. Thirdly, the goods have wheels, indicating that they have mobility as a feature. Fourthly, there is a superstructure, which is the revolving frame of equipment on which operating machinery is mounted along with the operator's cab. Fifthly, the carrier or chassis is the undercarriage of the crane and includes the carrier cab, wheels, and outriggers. This chassis is designed to support the rotating crane superstructure. Lastly, when in operation, the outriggers fix the equipment to the ground to provide support to lift heavy loads. The wheels do not touch the ground in such instances.

The CBIC noted that since the goods have features that are similar to motor vehicles as well as those of load-handling heavy machines, there are differing opinions on the classification of such goods.

One opinion states that the goods are essentially cranes that are used in lifting and handling and are therefore to be classified under heading 8426.

On the other hand, there is a different opinion relying on the ability of these goods to be propelled and moved from one place to another, which makes them similar to the motor vehicles classified under 8705.

The Board stated that the judgements and the classification opinions are specific to a particular good or product. The legal notes and the explanatory notes have been interpreted in the context of those specific goods with particular features. The goods referred to as "all terrain trucks" come in various types. It is imperative to outline a set of parameters that can serve as a guide to arrive at the classification of all goods.

Firstly, as a general principle, it can be seen that mobile machines that can move under load are classifiable under 8705. However, when the machine does not move under load or, if it does, when movement is limited and subsidiary to its main function, it is classifiable under 8426.

Secondly, when one or more of the propelling or control elements that are features of an automobile chassis are located in the cab of a lifting or handling machine mounted on a wheeled chassis, the product is to be included in heading 8426. When there are two cabs in the mobile machine, one that houses the propelling function connected to the chassis and another having the controls for the handling and lifting, the inclusion or exclusion from a heading can only be decided by examining the integration of the chassis with the working machine.

Lastly, when the work machine is merely mounted (not integrated mechanically) on the chassis, the goods are classifiable under 8705. When a chassis and a working machine are specially designed for each other and form an integral mechanical unit, and the chassis cannot be used for any other purpose, the goods are excluded from 8705 and are thus classifiable under 8426. Outriggers are crucial to the functioning of the mobile machine as they provide the necessary stability in order for the machine to lift heavy loads. If the outriggers are connected to and are a part of the sub structure, i.e., the chassis, and are controlled by the engine fitted with the chassis, it implies that the functioning of the outriggers, which are a part of the chassis, is crucial to the functioning of the crane. The superstructure, i.e. the crane, and the substructure, i.e. the chassis, can be said to be working in tandem and can thus be considered to be mechanically and electrically integrated, and the goods are classifiable under heading 8426. In the absence of integration of the chassis and working machine, the goods are classifiable under 8705.

Circular No. 20/2022-Customs

Dated: 22.09.2022

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