Circular No.20 / 2013- Customs

                              F.No. 528/102/2011-STO (TU)
                                   Government of India
                                    Ministry of Finance
                                 Department of Revenue
                            Central Board of Excise & Customs
                                            ****
                                                           229-A, North Block, New Delhi
                                                                          14th May, 2013
To

All Chief Commissioners of Customs/ Customs (Prev.)/ C&CE,
All Directors General of CBEC,
All Commissioners of Customs / Customs (Prev.) / C&CE
All Commissioners of Customs & Central Excise (Appeals).

Sir / Madam,

Subject: Classification of the machines commercially referred to as "Tablet Computers" ­
         regarding.
                                           ****

       Doubts have been raised regarding classification of products commercially referred
to as Tablet Computers under the Customs Tariff which is harmonised with the Harmonized
Commodity Description and Coding System, commonly known as "HS Nomenclature". The
two major competing headings are 8517 and 8471.






2.     The issue has been examined by the Board. The classification 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".

3.     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.
4.      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.






5.      In view of the foregoing, it is held that products at issue meet all the requirements
stipulated in Note 5 (A) to Chapter 84. 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. This decision is
consistent with WCO HSC decision to classify certain machines commercially referred to as
"Tablet Computers" in heading 8471, subheading 847130.

6.    Accordingly, pending classification may be finalized, and difficulties, if any, faced in
the implementation of this circular, may be immediately brought to the notice of the Board.



                                                                               Yours faithfully,



                                                                              Subodh Singh
                                                                   OSD (Customs), Tariff Unit
                                                                         Fax: 011-23072173
Internal circulation ­ As usual