The CBIC vide Instruction No. 15/2022-Customs dated July 20, 2022 has issued clarification w.r.t. applicable Basic Custom Duty (“BCD”) rate on parts used in the manufacturing of Liquid Crystal Device (“LCD”) and Light Emitting Diode (“LED”) TV panels.
Reference is invited to S. Nos. 515A and 515B of notification No. 50/2017-Customs dated June 30, 2017 that provides a concessional basic custom duty (BCD) rate of 5% for specified parts and sub-parts of Liquid Crystal Device (LCD) and Light Emitting Diode (LED) TV panels.
Representations have been received regarding the above mentioned exemption entries stating that while the description in the said entries provide a concessional BCD rate of 5% on import of Open cell (15.6″ and above) for use in the manufacture of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels as well as on specified parts for the manufacture of Open Cells for use in manufacture of LCD and LED TV Panels, these exemption entries do not refer to the proper tariff classification in view of the newly introduced heading 8524 for “Flat Panel Display Modules” in the Customs Tariff Act, as amended with effect from January 01, 2022. It may be noted that the issue has arisen in view of the new HSN 2022 introduced by the World Customs Organisation (WCO) to replace the HSN 2017 nomenclature for classification.
The matter was examined. The entry S. No. 515A of notification No. 50/2017-Customs referred to the heading 8529 and provided a concessional BCD rate for Open Cells used in the manufacture of TV panels, while the exemption entry S. No. 515B of notification No. 50/2017-Customs referred to the heading 8529 and provided a concessional BCD rate for specific parts used in the manufacture of Open Cells for use in manufacture of LCD and LED TV Panels, subject to conditions.
Till December 31, 2021, the Open Cells of LCD and LED TV Panels were classified under heading 8529 in HSN 2017, while the transposition from HSN 2017 to HSN 2022 came into effect from January 01, 2022. As per the explanatory notes to the heading 8524 published in HSN 2022 by WCO, the heading 8524, inter alia, includes Flat panel display modules without drivers or control circuits, which are generally referred to as ‘cells’. Accordingly, the Open Cells would be classified under the heading 8524 in this version of Harmonised System of Nomenclature (HSN) made effective from January 01, 2022. However, the parts of Open Cells are still classified under the heading 8529, which covers ‘Parts suitable for use solely or principally with the apparatus of headings 8524 to 8528’, provided that such parts are not specifically excluded from the heading 8529 based on the General Rules of Interpretation.
In view of the above, notification No. 39/2022-Customs dated July 12, 2022 has been issued to amend the entry under S. No. 515A of notification No. 50/2017-Customs in order to align the HSN codes provided therein with the explanatory notes to the heading 8524 as published by the WCO in HSN 2022.
For the removal of doubts, it is clarified that this change is only technical in nature. There is no change in the applicable BCD rate of 5% for Open cell (15.6″ and above) for use in the manufacture of LCD and LED TV Panels of heading 8524. Therefore, the benefit of the concessional BCD rate available under the exemption entry S. No. 515A of the notification No. 50/2017-Customs should not be denied, for the period since January 01, 2022 till the date of amendment of the said entry, on the mere ground that the classification used by the importer for the goods imported was 8529, provided that the goods imported conform to the description provided in the said exemption entry (i.e. Open Cells for use in manufacture of LCD and LED TV Panels), which is verifiable as the said exemption is subject to the condition that the importer follows the procedure set out in the Custom (Import of Goods at Concessional Rate of Duty) Rules, 2017.
These instructions would apply only in respect to the imports made under S. No. 515A of the notification No. 50/2017-Customs dated June 30, 2017 for the period of January 01, 2022 till July 12, 2022.
The Instruction can be accessed at: https://taxinformation.cbic.gov.in/view-pdf/1000430/ENG/Instructions
We have recently released the 7th Edition (May, 2022) of our book on Goods and Services Tax, titled, “GST LAW AND COMMENTARY – WITH ANALYSIS AND PROCEDURES”, updated with the Finance Act, 2022 in a set of 4 Volumes. We thank you all for the support and your enduring response.
Have a look at the complete tour of the Book at: https://cutt.ly/nF6O0oN
Order your copy now and be a part of the GST learning excursion in the most comprehensive and lucid form !!
For more details and purchase online at: https://cutt.ly/RFMox8D