Classification of goods — In the instant case, the applicant is seeking an advance ruling in respect of the following issue—
“Whether the Fan Coil unit is covered under HSN Code 8418 under Goods and Service Tax Act, 2017.”
Held that—We find that Fan Coil Unit (FCU) is a simple device consisting of a heating and or cooling heat exchanger or ‘Coil’ and fan. It is a part of HVAC system found in residential, commercial and industrial buildings. A FCU is a diverse device sometimes using ductwork and is used to control the temperature in space where it is installed or serve multiple spaces. It is controlled either by a manual on/off switch or by a thermostat which controls the throughput of water to the heat exchanger using a control valve and/or the fan speed.
From the detailed discussions about the exact nature and as to of which equipment the FCU is a part, we find that FCUs would clearly be covered under GST Tariff Heading 85159000 as parts of Air Conditioning machines of Heading 8515.
Further we find that the plea of the applicant contending that their goods would be covered under 8418 on the basis of the Hon’ble Supreme court decision in 2006(7) TMI- Supreme court of India in the case of CCE Delhi vs. Carrier Aircon Ltd. is not sustainable in view of the facts that the goods ‘chillers’ as discussed in this judgment had the basic function of chilling the water and were thus held by the Hon’ble Supreme Court to fall in Heading 8418 for Refrigerators and Freezers.
But we find that the basic function of a FCU is conditioning the temperature of a place or space and not freezing or refrigerating and therefore FCU would appropriately be covered under CTH 8415.
Ruling—
Fan Coil Unit would be covered under HSN Code 8415. — Bhutoria Refrigeration Pvt. Ltd., In Re.. [2018] 5 TAXLOK.COM 050 (AAR-Maharashtra)