Brake Pads GST Classification: 28% Rate Upheld as Motor Vehicle Parts

The case involved the classification of Brake Pads under GST, specifically whether they fall under ITC HSN 87083000 attracting 28% GST or ITC HSN 6813 attracting 18% GST. The Authority ruled that Brake Pads are correctly classified under ITC HSN 87083000, attracting a 28% GST rate as parts and accessories of motor vehicles. The decision was based on the manufacturing process and relevant HS codes, clarifying that mounted friction material on metal plates falls under the higher tax bracket.

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Issues involved:
Classification of Brake Pads under GST - Whether under ITC HSN 87083000 attracting 28% GST or ITC HSN 6813 attracting 18% GST.

Detailed Analysis:

1. Examination of Applicant's Request:
The applicant sought an advance ruling for the correct classification of their product, Brake Pad and Auto Parts, under either ITC HSN 87083000 attracting 28% GST or ITC HSN 6813 attracting 18% GST. The Jurisdictional Officer's report highlighted that the product, Brake Pads, manufactured by mounting Friction material on metal sheets, falls under ITC HSN 8708 and is taxable at 28% GST.

2. Proceedings of Personal Hearing:
During the personal hearing, it was revealed that the applicant is a 100% EOU exporting Brake Pads for motor vehicles. The office of Commissioner of Customs allowed correction of HSN from 6803 to 8708-3000 in shipping bills. The decision was reserved after thorough deliberations.

3. Authority's Findings:
The Authority reproduced relevant headings under ITC HS, clarifying that Brake Pads do not qualify under ITC HSN 6813 as it excludes mounted friction material. The product is correctly classified under ITC HSN 87083000. Additionally, parts and accessories of motor vehicles under HSN 8708 attract 28% GST as per notifications.

4. Advance Ruling:
The Authority ruled that Brake Pads, friction material mounted on metal plates, for motor vehicles of headings 8701 to 8705, are correctly classifiable under HSN 87083000. The GST rate applicable is 28% for parts and accessories of motor vehicles (excluding tractors).

This judgment provides a detailed analysis of the classification of Brake Pads under GST, emphasizing the correct classification under ITC HSN 87083000 and the corresponding GST rate of 28% for parts and accessories of motor vehicles. The decision was made after considering the applicant's manufacturing process, relevant HS codes, and GST notifications.

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