CLASSIFICATION
OF THE MACHINES COMMERCIALLY REFERRED TO AS “TABLET COMPUTERS”
Circular No: 20 /
2013- Customs
Dated :14/05/2013
1. The classification of
the machines commercially referred to as “tablet computers” is to be determined
by application of the General Rules for the Interpretation (GRIs) of the First
Schedule to the Customs Tariff Act (CTA), 1975.
GRI 1 requires
that, “in classifying articles, for legal purpose it shall be determined
according to the terms of the headings and any relative Section or Chapter
Notes”. Hence, all relevant legal texts must be considered.
Note 5.(A) to
Chapter 84 states that, “For the purposes of heading 8471, the expression
“automatic data processing machine” means machine capable of:
(i) storing
the processing programme or programmes and at least the data immediately
necessary for the execution of the programme;
(ii) being
freely programmed in accordance with the requirements of the user;
(iii) performing
arithmetical computations specified by the user; and
(iv) executing,
without human
intervention, a processing programme which requires them to modify their execution,
by logical decision during the processing run”.
In addition to the
above relevant Note 3 to Section XVI stipulates that, “unless the context
otherwise requires, composite machines consisting of two or more machines
fitted together to form a whole and other machines designed for the purpose of
per-forming two or more complementary or alternative functions are to be
classified as if consisting only of that component or as being that machine
which performs the principal function”.
2. A Tablet Computer
is designed to be primarily operated by using its touchscreen. It 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 (“Voice over Internet Protocol”) communications,
etc. In addition, it can also be connected to a cellular network to make voice
calls.
3. It is seen that
“Tablet Computers” can be programmed in a variety of ways thereby qualifying as
machines capable of being freely programmed in accordance with the requirements
of the user, as required by Note 5 (A) (ii) to Chapter 84.
It
is also held that the products at issue have essentially the same functionality
as a laptop. The function as an Automatic Data Processing Machine (ADP) is the
main function of the product, while other functionalities of said machines are
not different from the auxiliary functions that could be seen on any computer,
such as desktop or laptop computers.
The
mobile phone calling function could be provided by the products only as a
supplementary function because it could not be activated without running an
operating system of the “Tablet Computer”, and in order to use the function a
headset had to be used.
The
size of such machines when exceeding the dimensions mentioned in Note 8 to
Chapter 84 relating to the “pocket-size” machines of heading 8470, is too big
to be used principally for making voice calls. The tablet computers are not
intended to be a substitute for a mobile phone to make voice calls, but, according
to its main technical features is designed as a substitute for laptops.
The
difference between a “Smartphone” and a “Tablet Computer”, is not based on
whether the product has a voice calling function or not, but on the principal
features that a producer has intended for the device when designing and
developing it.
4. Therefore, it is
decided that machines commercially referred to as “Tablet Computers” are more
appropriately classifiable in heading 8471, subheading 847130, by application
of General Rules for Interpretation (GRI) of Import
Tariff,
1 (Note 3 to Section XVI and Note 5 (A) to Chapter 84) and 6.
Regards
CA. Mona Singhal
Partner
Arpit Gupta & Associates
Chartered Accountants
701, Nirmal Tower,
26, Barakhamba Road,
Connaught Place, Delhi-110001
Mobile:- +91-9873082769
Website: www.caaga.co.in
