How different stage of assembling of a Dumper are changing Customs classification and rate of Basic Custom Duty (BCD)

 

For the different stage of assembling and changing classification and rate of BCD

 

I.  Imported not as a  part of the CKD Kit ( Standalone )

S.NO	Parts  of the Motor Vehicle	CUSTOMS HEADING	BASIC CUSTOM DUTY
1	Diesel Engine (Pre Assembled )	8408	15%
2	Gearbox   (Pre Assembled )	8708	15%
3	Transmission Mechanism  (Pre Assembled )	8708	15%

 

S.NO	Parts of the Motor Vehicle	CUSTOMS HEADING	BASIC CUSTOM DUTY
4	Engine with Gearbox (Pre Assembled form )	8408	15%
5	Engine with Transmission Mechanism (Pre Assembled form)	8408	15%
6	Gearbox with Transmission Mechanism  (Pre Assembled form )	8708	15%

 

S.NO	Parts of the Motor Vehicle	CUSTOMS HEADING	BASIC CUSTOM DUTY
7	Engine with Gearbox and Transmission/flexible Shaft (Pre Assembled form)	8408	15%

 

S.NO	Parts  of the Motor Vehicle	CUSTOMS HEADING	BASIC CUSTOM DUTY
8	Chassis not fitted with engine (Pre Assembled form)	8708	15%

 

II. Imported  as a  part of the CKD Kit  in Pre-Assembled  form with all essential   components, parts and sub-assemblies  (  Rule 2(a) of the GIR and  Sn  524 (1) (a) of CN 50/2017)

S.NO	CKD Kit of a motor vehicle  with standalone unit  of	CUSTOMS HEADING	BASIC CUSTOM DUTY
1	Diesel Engine (Pre Assembled ), Gearbox   (Pre Assembled ), Transmission Mechanism  (Pre Assembled )	8704	15%

 

III. Imported  as a  part of the CKD Kit  in Pre-Assembled  form with all essential   components, parts and sub-assemblies  (  Rule 2(a) of the GIR and  Sn  524 (1) (b) of CN 50/2017)

 

S.NO		CKD Kit of a motor vehicle  with	CUSTOMS HEADING		BASIC CUSTOM DUTY
1		Engine with Gearbox (Pre Assembled form )	8704		25%
2		Engine with Transmission Mechanism (Pre Assembled form)	8704		25%
3		Gearbox with Transmission Mechanism  (Pre Assembled form )	8704		25%
4	Engine with Gearbox and Transmission/flexible Shaft (Pre Assembled form)		8704	25%

 

 

IV. Different stages of the manufacturing / assembling of the motor vehicle.

S.NO	Sub-Assembly of the Motor Vehicle	CUSTOMS HEADING	BASIC CUSTOM DUTY
1	Bodies (including cabs with all their fittings and accessories such as  dashboards, boots ,  seats and cushions, mats, Luggage rack an electrical fittings.	8707	15%

 

S.NO	Full motor vehicle  without bodies	CUSTOMS HEADING	BASIC CUSTOM DUTY
2	Chassis fitted with engine, transmission, steering gear , axels, wheels, bonnets, windscreens, mudguards, running-boards , dashboards with all instruments, tyres, batteries, and other electrical and electronics equipment. (As per HSN Explanatory note, it is full motor vehicle  without bodies )	8706	15%

 

 

S.NO	CKD Kit of full assembly of a motor vehicle -CBU form	CUSTOMS HEADING	BASIC CUSTOM DUTY
3	Chassis fitted with engine and cabs.	8704	40%

 

V. Engine, Gearbox and Transmission mechanism are not in pre-assembled condition (it means in CKD condition with their respective components and parts )

S.NO	Engine not in pre-assembled condition (ie CKD condition)	CUSTOMS HEADING	BASIC CUSTOM DUTY
1	cylinder, piston, connecting rod,  flywheel, inlet and exhaust valve,	8409	15%
	crank shaft and cam shaft	8483	15%

 

S.NO	Gearbox not in pre-assembled condition (ie CKD condition)	CUSTOMS HEADING	BASIC CUSTOM DUTY
2	gears, gearbox casings,	8708	15%

 

S.NO	Transmission mechanism not in pre-assembled condition (ie CKD condition)	CUSTOMS HEADING	BASIC CUSTOM DUTY
3	propeller shafts, half-shaft , gears, gearing, plain shaft bearing, reduction gear assemblies, universal joints, clutches, differential, Transmission shafts,  torque converters; flywheels and pulleys, pulley blocks, clutches and shaft couplings, universal joints	8708	15%

 

Notes-

1.It is clear from above analysis, that standalone unit of engine, gearbox and transmission in the pre-assembled conditions  and not in CKD conditions, are covered under SN 1(a) and  attracting BCD @ 15 %.

2. That full motor vehicle without bodies is attracting   Customs duty @ 15 % whereas assembly with SKD parts  are attracting Customs duty @ 25 %. This is an anomaly.

3. Under Sn 2(a) – It is pre-assembled condition.

4.. Under Sn 2(b) – It is  pre-assembled  Form

6. What it means that   engine, gearbox and transmission mechanism are not in a pre-assembled condition?

It means that at the   engine, gearbox and transmission mechanism are not in  pre-assembled condition as a single  unit but are  standalone units at the time of import.

7. What is meaning of  “engine or gearbox or transmission mechanism in pre-assembled form” ?

 It means   that if any of them is combined with other, such as engine with gear box or engine with transmission mechanism   or  engine with transmission  and gearbox, gear box with transmission mechanism, then   such assembly  acquired shape of  pre-assembled Form. In another words,  these are engine assembly, gear box assembly , and transmission assembly  .

8. Meaning of pre-assembled  condition  and  pre-assembled  form 

Dictionary meaning

KIT: A kit is a set of parts that can be put together in order to make something.( https://www.collinsdictionary.com/dictionary/english/kit )

 

 Condition:- a situation that must exist in order for something else to happen (https://www.oxfordlearnersdictionaries.com/definition/english/condition_1)

Form- the shape of somebody/something; a person or thing of which only the shape can be seen (https://www.oxfordlearnersdictionaries.com/definition/english/form_1?q=form)

When a particular shape forms or is formed, people or things move or are arranged so that this shape is made.

If something is arranged or changed so that it becomes similar to a thing with a particular structure or function, you can say that it forms that thing. (https://www.collinsdictionary.com/dictionary/english-thesaurus/form#form__1)