In re Lion Seat Cushions Private Limited (GST AAR Tamilnadu)
Two wheeler seat covers merit classification under the CTH 87149990 and are taxable @ 14% CGST 14% SGST vide entry no. 174 of Schedule IV of Notification No. 1/2017- CT (Rate), dated 28.6.2017, as amended.
Read AAAR Order: Two-Wheeler Seat Covers classifiable under CTH 87141090, 28% GST applicable
Condonation of Delay in Appeal Filing with AAAR: Lions Seat Cushions Pvt Ltd
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TAMILNADU
M/s. Lion Seat Cushions Private Limited, D.No.130/1, Saradha College Road, Salem (hereinafter called as the ‘Applicant’) is registered under the GST Acts with GSTIN: 33AACCL1446J 1ZP.
2. The Applicant is a manufacturer of Two Wheeler scat covers for Bikes and Scooters. The Applicant has sought for Advance Ruling regarding tax rate on the goods manufactured by them i.e. whether the GST rate of 28% collected and paid for two wheeler seat covers for Bikes and Scooters under HSN code 87089900 is correct.
2.1. The Applicant has submitted the copy of application in Form GST ARA – 01 and also submitted a copy of challan evidencing payment of application fees of Rs.5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017.
3. In the statement of facts, the Applicant has stated that, they were collecting 28% GST under HSN 8708 99 00 for Bike and Scooter seat covers which are manufactured by them, whereas other similar manufacturers collect 18% under HSN code 9401 2000 or 5% under HSN code 87149990. The customers who are buying the said two wheeler seat covers from the Applicant are resisting from paying 28% charged by them referring to the other dealers who are charging lower rate on the same product. Hence they have requested for Advance ruling regarding correct tax rate for the goods manufactured by them i.e whether the rate of 28% collected and paid by them for two wheeler seat covers for Bikes and Scooters under HSN code 87089900 is correct and if not correct, the appropriate tax to be collected for two wheeler seat covers.
4.1 The Applicant is under the administrative control of State Tax. The said jurisdictional authority has submitted the following remarks;
> According to the tax payers declared description, they are manufacturing Two Wheeler Seat Covers for Bikes and Scooters. In the said manufacturing process, the “U” foam purchased from other dealers are cut to the shape of two wheeler seat along with rexine sheets and stitched, and the said “Seat Covers” are fitted into Two Wheelers like Bike and Scooter. No service had been provided by the dealers and the entire collection and payment of taxes are under the category of “Manufacturing and selling of goods”.
> A close scrutiny of the sale invoices raised by the tax payer shows that they are manufacturing and selling seat cover to various variant of Hero Motor Cycles which cannot be used for other motor cycles, as the same is manufactured and sold as per the specifications of requirement of the Hero Motors cycles and made to fit to the exact requirement. Now it has to be decided that the sale of seat covers falls under HSN code 9401 2000 or 87089900 or otherwise.
> When the entry found in HSN code 9401 2000 categorically specifics the seats of kind of Motors cycles. Now the other question arises whether the seat cover falls under the category or not. Definitely the seat and seat covers are not one and the same and also it has to be decided whether seat cover is a part or accessory. The seat covers are meant for the protection of the seats and the functional value of seat cover is the comfort and convenience it extends to the rider and pillion rider. Thus the scat cover is nothing but an accessory that enhances the functional value and that the seat covers falls under HSN 8714 99 90 and the seat cover which being an accessory to Motor cycle is liable to GST at 28% (CGST at 14% and SGST at 14%) under the chapter/ heading/ sub-heading/Tariff 8711 and 8714.
> No proceedings are pending for adjudication in the applicant’s case relating to the question raised in the application for advance ruling.
4.2. The concerned Central Tax Officer has submitted comments as under:
> No proceedings are pending for adjudication in the applicant’s case relating to the question raised in the application for advance ruling.
> The Applicant has classified their product i.e. Seat Cover under HSN 87089900. As per HSN the description of for this chapter heading is as under:
