ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 18.12.2025
Advance Ruling Grants Duty Exemption for Static Converters Used in Telecommunication Devices
This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
The Customs Authority for Advance Rulings (CAAR), Mumbai, recently issued a significant ruling concerning the classification and duty exemption of AC-DC and DC-DC converters used in telecommunication equipment. This ruling provides clarity on the Harmonized System of Nomenclature (HSN) classification and the applicability of customs duty exemptions under Notification No. 25/2005-Customs dated March 1, 2005.
Background of the Case
M/s Sanmina SCI India Pvt Ltd, a company specializing in high-technology products for various industries, filed an application seeking an advance ruling on the classification and duty exemption of six different models of AC-DC and DC-DC converters. These converters are integral components in the manufacture of telecommunication equipment, including Wi-Fi receivers, Wi-Fi transmitters, uplink cards, and data-center switches.
The applicant sought clarity on two key aspects:
- The appropriate HSN classification for the imported AC-DC and DC-DC converters.
- The applicability of the “Nil” rate of Basic Customs Duty (BCD) under Serial No. 4 of Notification No. 25/2005-Customs for these converters.
Key Findings of the Ruling
- HSN Classification:
- The AC-DC power modules, specifically the DPS-500AB-40 A -AC-DC Power Module, were classified under CTI 85044029 as “Other Rectifiers.”
- The DC-DC converters, including PKU4913D Series DC-DC Converters, EBDW025A0B Barracuda Series DC-DC Converter Power Modules, ARTESYN ADH700-48S28 700 Watt Half-Brick DC-DC Converter, Q48SK12050 600 W Quarter Brick DC/DC Power Modules, and 6A Digital PicoDLynxTM Non-Isolated DC-DC Power Modules, were classified under CTI 85044090 as “Other Static Converters.”
The ruling emphasized that these converters fall under Chapter Heading 8504, which covers “Electrical Transformers, Static Converters, and Inductors.” The classification was determined based on the General Rules for Interpretation (GRI), HSN explanatory notes, and Section Notes of the Customs Tariff Act, 1975.
- Duty Exemption:
- The ruling confirmed that the AC-DC and DC-DC converters are eligible for the “Nil” rate of Basic Customs Duty under Serial No. 4 of Notification No. 25/2005-Customs. This exemption applies to static converters used in telecommunication apparatus other than cellular mobile phones.
- The technical datasheets provided by the applicant demonstrated that the imported converters are specifically designed for use in telecommunication equipment, such as Wi-Fi receivers, transmitters, and data-center switches. This established their eligibility for the duty exemption.
Significance of the Ruling
This ruling is a landmark decision for businesses involved in the import and manufacture of telecommunication equipment. It provides clarity on the classification of AC-DC and DC-DC converters, ensuring that companies can accurately determine their customs obligations. Additionally, the confirmation of duty exemption under Notification No. 25/2005-Customs will significantly reduce costs for manufacturers, promoting the growth of the telecommunication sector in India.
Conclusion
The CAAR’s ruling underscores the importance of advance rulings in providing certainty and transparency in customs procedures. By addressing the classification and duty exemption of AC-DC and DC-DC converters, the ruling supports businesses in navigating complex customs regulations and encourages the development of high-technology telecommunication equipment in India.
Source: CAAR Mumbai
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