Product Classification: Disc Brake Pads Taxed at 28% under CGST

The Authority classified the product, Disc Brake Pads, under chapter heading 8708 for tax purposes, subject to 28% tax under CGST and MGST Acts. This decision was based on the analysis of the manufacturing process, product usage, and relevant tariff headings, resolving the classification query effectively.

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Issues: Classification of product under HSN code - 6813 or 8708 for tax purposes.

Analysis:
1. Facts and Contentions by Applicant:
The applicant, a manufacturer of Disc Brake Pads (DBP), sought clarification on the appropriate HSN code for their product. They argued that the DBP should be classified under 6813 due to the absence of mounting, as per the industry understanding. They detailed their manufacturing process and the materials used in producing DBPs for passenger and commercial vehicles.

2. Contentions by Concerned Officer:
The concerned officer contended that the DBPs should be classified under HSN code 8708, attracting 28% GST, based on the manufacturing activities and the description of products submitted. They emphasized that DBPs are parts and accessories of motor vehicles, falling under chapter heading 8708.

3. Observations and Decision:
The Authority analyzed the relevant tariff headings, specifically 6813 and 8708, along with the Explanatory Notes to the Harmonized System of Nomenclature. They noted that products mounted on brake systems are excluded from 6813, supporting the classification under 8708 for DBPs. The Authority determined that DBPs are identifiable for use in braking systems of vehicles, meeting the conditions of chapter heading 8708.

4. Conclusion:
In the final order, the Authority ruled that the product, Disc Brake Pads, should be classified under chapter heading 8708, subject to 28% tax under CGST and MGST Acts. The decision was based on the analysis of the manufacturing process, product usage, and relevant tariff headings, resolving the classification query raised by the applicant effectively.

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