Classification of "Air Springs" under Tariff Heading 8708 and Applicable GST Rate Determined

The case involved the classification of "Air Springs" under the appropriate Tariff heading and determination of the applicable GST rate. The authority ruled that "Air Springs" are specifically designed as parts of the suspension system for motor vehicles and are classified under CTH 8708, specifically under 87088000. The applicable GST rate for "Air Springs" was determined based on the descriptions in Notification No. 01/2017-C.T.(Rate) dated 28.06.2017, with the product falling under CTH 8708 8000.

---

---

Issues Involved:
1. Classification of "Air Springs" under the appropriate Tariff heading.
2. Determination of the applicable GST rate for "Air Springs."

Detailed Analysis:

Issue 1: Classification of "Air Springs" under the appropriate Tariff heading

Applicant's Argument:
- The applicant contends that "Air Springs" should be classified under Tariff heading 40169990 as "Other Articles of Vulcanised Rubber other than Hard Rubber," attracting an 18% GST rate.
- They argue that the functionality of "Air Springs" is primarily derived from the vulcanized rubber component, which forms 40% of the product, with the remaining 60% being metal.
- The applicant references the Supreme Court decision in O.K. Play (India) Ltd. v. Commissioner of Central Excise, emphasizing that the functional utility and predominant usage of the product should be considered for classification.
- They also rely on a US tariff classification ruling which classified a similar product under a heading for vulcanized rubber articles used in vehicles.

Authority's Analysis:
- The product "Air Springs" is composed of vulcanized soft rubber and other materials, with its primary function being to provide suspension in vehicles.
- The classification under CTH 40169990 is considered a residual entry, not a specific one.
- The Explanatory Notes to HSN indicate that articles of vulcanized rubber not covered by preceding headings fall under this residual category.
- The product is designed and manufactured for use in motor vehicles falling under CTH 8701 to 8705, which suggests a more specific classification under CTH 8708.

Conclusion:
- The Authority concludes that "Air Springs" are not merely articles of vulcanized rubber but are specifically designed as parts of the suspension system for motor vehicles.
- Therefore, "Air Springs" are more appropriately classified under CTH 8708, specifically under 87088000, which covers "Suspension systems and parts thereof (including shock absorbers)."

Issue 2: Determination of the applicable GST rate for "Air Springs"

Applicant's Argument:
- The applicant initially classified "Air Springs" under CTH 8708 9900, attracting a 28% GST rate.
- They later sought to reclassify the product under CTH 40169990 to benefit from an 18% GST rate.

Authority's Analysis:
- The Authority examines the relevant Section and Chapter Notes, as well as the General Explanatory Notes of the First Schedule to the Customs Tariff Act.
- The product's primary function as a suspension system part for motor vehicles aligns with CTH 8708 8000.
- The specific entry for suspension systems under CTH 8708 8000 takes precedence over the residual entry under CTH 8708 9900.

Conclusion:
- The "Air Springs" are rightly classified under CTH 8708 8000.
- As per Notification No. 01/2017-C.T.(Rate) dated 28.06.2017, the applicable GST rate is determined based on the descriptions in the notification with the CTH at the four-digit level.

Ruling:
- "Air Springs," manufactured and supplied by the applicant, are rightly classified under CTH 8708 and more specifically under CTH 8708 8000.

---