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Issues: Whether the product "seat adjuster" is classifiable under Chapter 9401 at Serial No. 435A of Notification No. 1/2017-Central Tax (Rate) or under Chapter 8708 at Serial No. 170 of the said Notification.
Analysis: The product was found to function as a mechanism for moving and adjusting the seat for comfort and convenience, with safety features, rather than as an essential part of the seat itself. Relying on the settled classification approach that an article complete in itself and used only to improve the efficiency or convenience of a seat does not become a part of the seat, the Authority followed the Supreme Court's reasoning that such seat adjustment mechanisms are adjuncts fitted in motor vehicles and fall within the scope of parts and accessories of motor vehicles under Chapter 8708. The Authority also noted that the applicant itself had shifted classification to HSN 8708 and paid GST accordingly.
Conclusion: "Seat adjuster" is not classifiable under Chapter 9401 and is classifiable under Chapter 8708 at Serial No. 170 of Notification No. 1/2017-Central Tax (Rate), attracting 14% CGST and 14% HGST.
Ratio Decidendi: A seat-adjustment mechanism that is only an adjunct for comfort and convenience, and not an essential component of the seat, is classifiable as an accessory of the motor vehicle under Chapter 8708 rather than as a part of a seat under Chapter 9401.
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