Whether Roof-Mounted Air Conditioners For Trains Attract 18% GST Or 28% GST? Delhi High Court To Decide

The Delhi High Court will soon decide the GST rate applicable to roof-mounted air conditioners of specific designs manufactured for the railways.

A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta are seized with a petition filed by railways and aerospace technology company StesaLIT Limited, challenging a Circular issued by the Union Finance Ministry in 2024, stipulating that above said AC units shall be classified under HSN 8415 and not HSN 8607.

HSN code 8415 attracts GST at the rate of 28% while HSN Code 8607 attracts GST at the rate of 18%.

Counsel appearing for the Petitioner-company submitted that the roof-mount AC units (RMPUs) have always been classified under HSN Code 8607 and payment of 18% GST was the norm; and thus agreements have been entered into by the Petitioner on the said basis.

It was the further stand of the Petitioner that the impugned circular is without jurisdiction inasmuch as it takes away the power of the Adjudicating Authority to decide the correct classification.

The company also cited three advance rulings issued by the Authorities for Advance Ruling in Uttar Pradesh, in Madhya Pradesh and Himachal Pradesh, wherein RMPU of this nature have been classified under HSN 8607 and not 8415.

The Advance Ruling Authority, Uttar Pradesh on 14th February, 2020 and the Advance Ruling Authority, Himachal Pradesh on 11th April, 2022 had ruled that “The classification of the "Roof Mounted AC Package Unit", manufactured as per the specific design and layout provided by the Railways and supplied to the Indian Railways only and no-where else, falls under Chapter 86.07 of the GST Tariff.”

Considering the above, the Court directed that the proceedings initiated against the Petitioner-company during pendency of the challenge shall be subject to the outcome of this petition. 

“It is made clear that the final order shall not be given effect without further orders of this Court,” the Court said and listed the matter on May 9. Meanwhile, the Department has been directed to file its response to the petition.

Appearance: Mr. Balbir Singh, Sr. Adv. with Mr. Divyakant Lahoti, Ms. Praveena Bisht, Mr. Siddharth Tripathi, Mr. Karan Sachdeva & Ms. Shivali Shah, Advs for Petitioner; Mr. Aditya Singla, SSC with Mr. Umang Misra, Adv for Respondent

Case title: Ms Stesalit Limited & Anr v. Union Of India & Ors.

Case no.: W.P.(C) 3138/2025