Classification of Motor Vehicle Seat Parts Under GST

In re Fine Tools (India) Pvt. Ltd (GST AAR Karnataka)

The Karnataka Authority of Advance Ruling (AAR) has determined the correct classification and GST rate for the goods manufactured by Fine Tools (India) Pvt. Ltd. The company, which produces sub-assemblies and parts specifically for seats used in motor vehicles, had requested a ruling to confirm its interpretation of the GST rates. The core of the issue was to clarify whether these parts would be subject to the same tax rate as the complete car seats, which had recently been amended.

The company argued that while a new entry (210A) in Schedule IV of Notification No. 1/2017-Central Tax (Rate) made complete “Seats of a kind used for motor vehicles” taxable at 28%, the “parts thereof” were not explicitly included in this new entry. Instead, they contended that the parts should remain under the amended Entry 435A of Schedule III, which covers a broader category of seats and their parts, and thus should attract an 18% GST rate.

After reviewing the relevant notifications, amendments, and the Customs Tariff Act, the AAR agreed with the company’s interpretation. The ruling confirmed that the new entry for car seats did not extend to their parts. Consequently, the AAR concluded that the goods manufactured by Fine Tools (India) Pvt. Ltd.—specifically the parts of seats for motor vehicles—are correctly classified under Tariff Heading 9401 (specifically 9401 90 00) and are subject to a GST rate of 18%, as per Entry 435A of Schedule III of the notification. This provides a clear classification and tax rate for the company’s products.