TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Classification of 'Seat Adjuster' as Accessory, Not Essential Part under HSN 8708 vs. 9401: Implications for GST</h1> <h3>In Re: M/s. Shiroki Technico India Pvt. Ltd.,</h3> In Re: M/s. Shiroki Technico India Pvt. Ltd., - TMI Issues Involved:1. Classification of 'seat adjuster' under GST.2. Determination of applicable GST rate for 'seat adjuster'.3. Interpretation of relevant tariff headings and notifications.Issue-Wise Detailed Analysis:1. Classification of 'seat adjuster' under GST:The applicant, engaged in manufacturing seat devices, window regulators, and other components for motor vehicles, sought clarity on classifying 'seat adjuster' under GST. They argued that 'seat adjuster' should be classified under HSN 9401, which pertains to seats and parts thereof, as they believed it to be an integral part of the seat. Historically, the applicant classified the product under HSN 9401 and paid the applicable taxes accordingly. However, an internal audit suggested that the product might fall under HSN 8708, which covers parts and accessories of motor vehicles, leading to a higher tax rate.2. Determination of applicable GST rate for 'seat adjuster':Initially, the 'seat adjuster' was taxed at 28% (14% CGST + 14% SGST) under HSN 9401. Post-amendment via Notification No.41-Central Tax (Rate) dated 14.11.2017, the rate was reduced to 18% (9% CGST + 9% SGST). However, if classified under HSN 8708, the applicable rate would revert to 28%. The applicant, to avoid potential liabilities, reclassified the product under HSN 8708 from April 1, 2019, and paid the differential tax under protest.3. Interpretation of relevant tariff headings and notifications:The core issue was whether 'seat adjuster' should be classified under HSN 9401 or HSN 8708. The applicant argued that 'seat adjuster' is an essential part of the seat, thus fitting under HSN 9401. They cited various judicial precedents and explanatory notes to support their claim. However, the ruling authority examined the definitions and explanatory notes for both headings. They concluded that 'seat adjuster' is an accessory rather than an essential part of the seat. It enhances the seat's functionality but is not indispensable for the seat's basic function. Therefore, 'seat adjuster' fits the definition of an accessory under HSN 8708, which covers parts and accessories of motor vehicles.Discussion & Findings:The authority reviewed the applicant's submissions, including diagrams and functional descriptions of the 'seat adjuster'. They noted that while the 'seat adjuster' improves the seat's convenience and safety, it is not an essential component. The seat remains functional without it. Thus, the 'seat adjuster' qualifies as an accessory, not a part of the seat. The authority referred to relevant case laws, including a Supreme Court judgment in Commissioner of Central Excise v/s Insulation Electrical (P) Ltd., which supported classifying similar products as accessories under HSN 8708.Ruling:The product 'seat adjuster' manufactured and supplied by the applicant merits classification under Tariff item No. 8708 of the First Schedule to the Customs Tariff Act, 1975, and is covered under Serial No. 170 of Schedule-IV of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017. This classification subjects the 'seat adjuster' to a GST rate of 28% (14% CGST + 14% SGST).
TaxTMI 