GST Rate Notification and CTA, 1975 – cousins at a family wedding!

The Customs Excise and Service Tax Appellate Tribunal (CESTAT) Principal Bench addressed a key interpretational issue in Samsung India Electronics Pvt Ltd vs Principal Commissioner of Customs (2025) regarding classification and tax rates under GST vis-à-vis the Customs Tariff Act (CTA), 1975.

1. Legal Background

• GST Rate Notifications adopt the structure and interpretative rules of the CTA, but only “so far as may be,” implying they apply to the extent possible without overriding the GST notifications’ distinct language.
• The CTA contains General Rules of Interpretation (GRI) to guide tariff classification consistently.

2. Facts of the Samsung Case

• Samsung imported lithium-ion batteries designed specifically for mobile phone manufacturing.
• The department demanded higher IGST rates, classifying batteries under CTA headings attracting 28% or 18% tax.
• Samsung argued these batteries fall under Serial No. 203 of the IGST Rate Notification (12%) covering “parts for manufacture of telephones,” which has distinct language from the CTA.

3. Department’s Arguments

• GRI and CTA chapter/section notes govern classification and should apply to IGST notifications.
• CTA’s specific headings for lithium-ion batteries should take precedence over generic parts classifications.

4. Taxpayer’s Arguments

• The IGST Rate Notification’s plain language should govern, and it must be construed strictly in favor of the taxpayer.
• The phrase “so far as may be” limits rigid application of CTA rules that conflict with specific GST notification wording.
• Classification must respect the sui generis nature of certain IGST entries like Serial No. 203.

5. Tribunal’s Findings

• The IGST Rate Notification entries contain unique language distinct from the CTA and should be interpreted on their own terms.
• The phrase “so far as may be” constrains automatic and absolute reliance on CTA rules for GST classification.
• The lithium-ion batteries were correctly classified under Serial No. 203 attracting 12% IGST.
• The department’s demand for higher IGST under CTA-based headings was set aside.

6. Key Takeaway

• GST Rate Notifications and the CTA are related but not fully aligned—interpretation must prioritize the specific language of GST notifications.
• Businesses should carefully examine whether product descriptions in GST notifications align with CTA or require a distinct interpretive approach.
• This distinction impacts applicable tax rates, compliance, refunds, and audit outcomes as GST matures.

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(The author is a practicing advocate, Co-Founder and Legal Head of RB LawCorp.
He specializes in GST law. Suggestions or queries can be directed to
ashsharma@rblawcorp.in. The views expressed in this article are strictly
personal.)