Question: Rate of GST on cartridges for ink & laser printers / multi-functional devices.

Question: Rate of GST on cartridges for ink & laser printers / multi-functional devices.

Explaining terms used:

84.43 - 84.43 is product category code under HS classification used worldwide. Here 84 is chapter heading and 43 is sub-heading of 84, and in 84.43 different printing machines like offset, letterpress, flex, gravure, flat bed, computer printers etc. and their parts are listed with a unique 8 digit product codes (with first 4 digits as 84.43).

Printers (Computer Printers) – In 84.43 our concerning printers (IT industry) are Line, Dot Matrix, Laserjet, MFD, Inkjet, Facsimile, Photocopier.

Parts and accessories thereof – include spare parts, components & accessories of above mentioned printers, cartridges and cartridge components.

MFD – Multi Functional Device (ink or laser printers with photocopier, scanner or fax).

Questioned IT products fall under HSN Heading 84.43 and in GST Gazette vide Notification Number 1/2017 – Integrated Tax (Rate) dated 28^th June, 2017 are covered in following 3 entries:

-          Page 50, Schedule 3 (GST @18%), S. No. 335

-          Page 66, Schedule 4 (GST @28%), S. No. 129

-          Page 58, Schedule 3 (GST @18%), S. No. 453

1.       Page 50, Schedule 3 (GST @18%), S. No. 335:

“Printing machinery used for printing by means of plates, cylinders and other printing components of heading 84.42; Printers [other than machines which perform two or more of the functions of printing, copying or facsimile transmission] capable of connecting to an automatic data processing machine or to a network [other than copying machine, facsimile machines]; parts and accessories thereof [other than ink cartridges with or without print head assembly and ink spray nozzle]”.

In simple words as per above entry items WHICH are to be taxed @18% GST:

-          INCLUDE:

-          Printing machinery which requires plates, cylinders for printing (not related to products in question).

-          Other printing components of heading 84.42 (not related to products in question).

-          Computer Printers  viz. Line, DMP, Inkjet (single function), Laser jet (single function)

-          Parts, accessories and cartridges of printers mentioned above

-          EXCLUDE:

-          MFDs

-          Photocopiers & Fax machine

-          All type of ink cartridge (with or without print head assembly and ink spray nozzle)

-          DOUBTFUL:

-          Parts & accessories and cartridges of MFDs

2.       Page 66, Schedule 4, S. No. 129 Tax @28%

“Printers which perform two or more of the functions of printing, copying or facsimile transmission, capable of connecting to an automatic data processing machine or to a network; copying machines, facsimile machines; ink cartridges with or without print head assembly and ink spray nozzle”.

In simple words as per above entry items WHICH are to be taxed @28% GST:

-          INCLUDE:

-          MFDs (2 or more functions)

-          Photocopiers, facsimiles

-          All type of ink cartridge (with or without print head assembly and ink spray nozzle)

-          EXCLUDE:

-          Parts & accessories and cartridges

3.       Page 58, Schedule 3, S. No. 453 Tax @18%

“Goods which are not specified in schedule 1, 2, 4, 5 or 6”

In simple words all the items which are not mentioned (or covered) anywhere in any schedule would attract GST @18%.

Means: Now, since parts & accessories of MFDs are not covered in entry no. 2 (GST @28%) and if they are not covered in entry number 1 too (GST @18%) ALSO since they are not mentioned anywhere else SO they automatically get covered in entry number 3 (GST @18%). So all laser cartridges including cartridges for MFDs attract GST @18%, whereas ink cartridges of all types attract GST @28%.

Note: Aforesaid conclusion is drawn as per my understanding towards the subject, including trade & professional friends. In no way it is or my or our company’s responsibility towards rate of GST or liability under GST act or any legal matter of anybody of any nature whatsoever. And the reason for creating this advisory note and making it public is that now since there is confusion upon rate of GST specially on cartridges for laser printers (single function) for MFDs and for both; as some companies say it is 18% whereas some other say 28%.

Here aim is that to get transparency in the same matter again so that everyone is able to do business peacefully, confidently and without any fear. As 10 years back too it were our joint efforts which brought clarity on rate of VAT on cartridges for dot-matrix / ink & laser printers (to 5% from whether 5% or 12.5%).