Tax Rate for Vehicle Fuel Conversion Electronic Parts: 28% GST Ruling

The Authority for Advance Ruling in Gujarat determined that the tax rate for electronic parts used in vehicle fuel conversion is 28% (14% SGST + 14% CGST) under the Goods and Service Tax Act. Additionally, the applicable HSN code for these parts was identified as 87089900. This ruling provides clarity on the taxation and classification of the electronic parts, resolving the issues raised by the applicant regarding tax rates and HSN codes.

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Issues: Determination of tax rate under SGST and CGST for specific electronic parts used in vehicle fuel conversion and identification of the applicable HSN code.

Analysis:

1. Tax Rate under SGST and CGST:
The applicant sought an Advance Ruling regarding the tax rate under SGST and CGST for the electronic parts they manufacture for vehicle fuel conversion. The Authority considered the details provided by the applicant, including the products like change over switch, emulator, timing advance processor, and pressure gauge. These parts are crucial for converting vehicles from petrol to CNG/LPG and vice-versa. The Authority noted that such products are essential components for vehicles that can run on both petrol and CNG, falling under specific Chapter Sub-headings of the Customs Tariff Act. After careful analysis, the Authority concluded that the tax rate applicable to these products would be 28% (14% SGST + 14% CGST) under the Goods and Service Tax Act.

2. Identification of HSN Code:
Another issue raised by the applicant was the identification of the appropriate HSN code for the electronic parts they manufacture. The Authority examined the nature and use of the products, considering their role in vehicle fuel conversion. Based on the detailed description provided by the applicant and the specific functions of the parts, the Authority determined that the applicable HSN code for these products would be 87089900. This classification aligns with Schedule-IV of Notification No:1/2017-Central Tax (Rate) dated 28.06.2017, where GST at a rate of 28% is applicable. The ruling provided clarity on the HSN code to be used for these electronic parts.

In conclusion, the Authority for Advance Ruling in Gujarat deliberated on the tax rate under SGST and CGST along with the identification of the appropriate HSN code for electronic parts used in vehicle fuel conversion. The ruling clarified that the tax rate for these products would be 28% (14% SGST + 14% CGST) and the applicable HSN code would be 87089900. This comprehensive analysis addressed the key issues raised by the applicant, providing certainty regarding the taxation and classification of the manufactured electronic parts.

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