Track Assembly for Automotive Seats: GST Classification Ruling

The Track Assembly manufactured by the applicant, used in automotive seating systems, was classified under CTH 8708 as an accessory to motor vehicles, attracting a GST rate of 28%. The ruling determined that the Track Assembly is not an essential part of the seat but enhances functionality. This classification aligns with similar goods and Schedule-IV of Notification No. 1/2017, resulting in a 28% GST rate (14% CGST + 14% SGST) for parts and accessories of motor vehicles.

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Issues Involved:
1. Classification of the "Automotive Seating System" manufactured by the applicant.
2. Determination of the applicable GST rate for the goods manufactured.

Detailed Analysis:

Issue 1: Classification of the "Automotive Seating System"

The applicant, engaged in the manufacture of seat components and accessories for four-wheelers, sought to determine the correct classification of their product, specifically the "Track Assembly" used in automotive seating systems. The applicant argued that the Track Assembly should be classified under HSN 8708 99 00 as "parts and accessories of motor vehicles," attracting a GST rate of 28%, rather than under HSN 9401 99 00 as "parts of seats," which attracts a lower GST rate of 18%.

The Track Assembly, which includes components like Rail Assembly and Cushion Panel Assembly, is fitted to the floor of a car and enables the seat's forward and backward movement. The applicant contended that this assembly is not an essential part of the seat but rather an accessory that enhances the seat's functionality and comfort.

The applicant referenced the Supreme Court ruling in Commissioner of C.Ex., Delhi Vs. Insulation Electrical (P) Ltd., which classified similar goods under CETH 8708, supporting their argument that the Track Assembly should be classified under HSN 8708 99 00.

Upon examining the submissions, the Authority noted that the Track Assembly is fitted to the floor of the car and facilitates the seat's movement. Since the seat is complete without the Track Assembly, it was concluded that the Track Assembly is not a part of the seat but an accessory to the motor vehicle.

The Authority determined that the Track Assembly is an accessory to the motor vehicle and falls under CTH 8708, "Parts and accessories of the motor vehicles," as it meets the criteria of being suitable for use solely or principally with motor vehicles, not being excluded by Section Note 2 to Section XVII, and not being specifically mentioned elsewhere in the nomenclature.

Issue 2: Applicable GST Rate

Having classified the Track Assembly under CTH 8708, the applicable GST rate was determined based on the Schedule-IV of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017. The relevant entry, Sl.No.170, lists "Parts and accessories of the motor vehicles of headings 8701 to 8705," attracting a GST rate of 28% (14% CGST + 14% SGST).

Ruling:
1. The product "Track Assembly" manufactured and supplied by the applicant is classified under CTH 8708 of the First Schedule to the Customs Tariff Act, 1975.
2. The applicable GST rate is 28% (14% CGST + 14% SGST) as per entry Sl.No.170 of Schedule-IV of Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 and corresponding state notification.

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