Clarification on classification of tablet computers under Customs Tariff

 

The Central Board of Excise & Customs (“CBEC”) has issued a
Circular No 20/2013-Customs dated May 14, 2013 (“Circular”) clarifying the classification of tablet computers under HSN 8471 30.

Background

The classification of products commercially known as tablet computers under customs has been a bone of contention for sometime now. The issue germinates from the nature of the product itself, which is capable of performing more than one function. The product is used primarily as a replacement for a laptop computer but also performs the function of a mobile phone. Therefore, the classification of the product has been disputed at the time of clearance from customs.

Clarification issued by CBEC

The CBEC has now clarified that tablet computers shall be classifiable under HSN 8471 30, which is the same classification used for laptops.

In arriving at this conclusion, the Circular has laid out the following:

· Tablets have same functionality as a laptop as the same can process data, execute programs and connect to the Internet via a wireless network in order to, for example, exchange and manage e-mails, exchange or download files, download software applications, conduct video or VoIP communication, apart from being connected to a cellular network to make calls.

In other words, automatic data processing is the main functionality, while other features are auxiliary in nature.

· For the purpose of using the mobile phone function, the same cannot be activated without running the operating system of the tablet computer, and in order to use the function a headset had to be used. Hence, this is a supplementary function.

· Tablets are not intended as substitute for mobile phones, but as a substitute for laptops.

· Specifically, it has differentiated tablet computer from a smartphone by suggesting that the principal feature for which the tablet computer is designed is different from a smartphone, though both products may have a voice calling function.

· The Circular also has relied on the classification as adopted by the World Customs Organisation (WCO) Harmonized System Committee to be under sub heading 847130.

Please click on the link to read the circular.