Car seat cushion suspension wires and steel hooks classified under HSN 94019900 attracting 18% GST instead of 28%

The AAR Tamil Nadu classified car seat cushion suspension wires and steel hooks under HSN 94019900, attracting CGST 9% plus SGST 9%, rather than HSN 87089900 with CGST 14% plus SGST 14%. The Authority determined these items are integral parts of seat structure, essential for basic cushioning function and forming building blocks of the steel framework. Without these components, the seat cannot achieve its basic structure or cushioning effect, making them seat parts under Chapter 9401 rather than general motor vehicle accessories under Chapter 8708.

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Issues Involved:
1. Classification of 'Car Seat Cushion Suspension Wires' and 'Steel Hooks' under the appropriate HSN code.
2. Applicable GST rate for the classified items.

Summary:

Issue 1: Classification of 'Car Seat Cushion Suspension Wires' and 'Steel Hooks'

The Applicant, engaged in the manufacture of 'Car Seat Cushion Suspension Wires' and 'Steel Hooks', sought an advance ruling on their classification under the Harmonized System of Nomenclature (HSN). The Applicant contended that these items should fall under HSN 94019900, attracting a GST rate of 18% (CGST 9% + SGST 9%), as they are parts of car seats. The State jurisdictional officer argued that these items should be classified under HSN 87089900, attracting a GST rate of 28% (CGST 14% + SGST 14%), as parts and accessories of motor vehicles.

Issue 2: Applicable GST Rate

The Authority for Advance Ruling (AAR) examined the submissions and relevant legal provisions, including the Customs Tariff Act, 1975, and the relevant HSN explanatory notes. The AAR noted that for a product to classify under Chapter 9401, it must be an integral part of a seat, essential for its function. The AAR found that the 'Car Seat Cushion Suspension Wires' and 'Steel Hooks' are integral parts of the car seat structure, providing necessary support and cushioning, and thus should be classified under HSN 94019900.

Decision:

The AAR ruled that:
1. The 'Car Seat Cushion Suspension Wires' manufactured by the Applicant will fall under HSN 94019900, attracting CGST 9% and SGST 9%.
2. The 'Steel Hooks' manufactured by the Applicant, used in the manufacture of car seats, will also fall under HSN 94019900, attracting CGST 9% and SGST 9%.

The ruling emphasized that these items are essential parts of car seats, not merely accessories, and thus should be classified under the specific heading for parts of seats rather than the general heading for motor vehicle parts and accessories.

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