September 5, 2018:
Delhi HC has expounded that,"E-reading devices such as Kindle are not exempted from basic Customs Duty as they do not qualify as “Electrical Machines with translation or dictionary functions”.
HC's Division Bench comprising of Justice Sanjiv Khanna and Justice Chander Shekhar was hearing a Writ Petition filed by Principal Commissioner of Customs, Air Cargo Complex (Import) and Centre.
Delhi HC Bench stated that,“Kindle device is an electronic device designed for use as an electronic book reader. As an electronic book reader, it has several e-books pre-installed in the device and other e-books can be downloaded".
Bench further added that,"The product is developed and designed to function as an e-book reader and is sold and bought as a e-book reader and not as a translator or as a dictionary".
Principal Commissioner of Customs had sought the setting aside of a May-2015 order of the Authority for Advance Rulings (AAR) holding that Kindle e-reading devices were exempt from basic customs duty.
AAR had exempted Kindle, which is imported by Amazon Seller Services Private Limited, by virtue of Exemption Notifications dated March 1, 2005, and December 30, 2006, which provided for an exemption to “electrical machines with translation or dictionary functions” from basic customs duty.
High Court Bench concluded by stating that,“The exemption notification would apply where the device is an electrical machine covered under tariff item No.8543 89/8543 7099, and its primary and basic function should be to translate or perform dictionary function. E-book readers would be appropriately classified in others as distinct from electrical machines with translation and dictionary function.”
HC Bench proceeded to set aside AAR's Order.
But, Amazon Seller Services was exempted from paying the basic customs duty on Kindle for the period between May 15, 2015, till May 11, 2017, i.e., the date on which the impugned order was passed and till writ petition was filed.
Source PTI
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