In re Saddles International Automotive & Aviation Interiors Private Limited (GST AAR Andhra Pradesh)
Question: Whether the product namely ‘Car Seat Covers’ merits classification under HSN 9401? If not, what is the correct classification applicable to ‘Car Seat Covers’?
Answer: Car seat covers fall under the entry at Serial No.170 under HSN 8708 Schedule IV of Notification No 1/2017-Central Tax (Rate) dt: 28.06.2017 attracting tax rate of CGST+SGST (14%+14%) @ 28%.
Question: Is SI.No.435A of Schedule IV of the Notification No 1/2017-Central Tax (Rate) applicable to ‘Car Seat Covers’? If not, what is the applicable entry under the said Notification?
Answer: Not applicable
Read AAAR Order: Seat Covers Classifiable as Accessories Under HSN 8708 & not as Seats Under HSN 9401
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, ANDHRA PRADESH
(Under sub-section (4) of Section 98 of Central Goods and Services Tax Act, 2017 and sub- section (4) of Section 98 of Andhra Pradesh Goods and Services Tax Act, 2017)
1. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and SGST Act, 2017 are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the APGST Act.
2. The present application has been filed u/s 97 of the Central Goods & Services Tax Act, 2017 and AP Goods & Services Tax Act, 2017 (hereinafter referred to CGST Act and APGST Act respectively) by M/s. Saddles International Automotive & Aviation Interiors Private Limited (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017.
Brief Facts of the case:
3.1 M/s. Saddles International Automotive & Aviation Interiors Private Limited are mainly engaged in the business of production and manufacture of car seat covers, and other allied accessories necessary for seats. They sell the manufactured seat covers to Car seat makers who affix the seat covers into the seats and thereafter the seat is affixed to the motor vehicle. The applicant approached the Authority for Advance Ruling on the classification issue of the specific product i.e., ‘car seat’ covers’ which is manufactured by the applicant.
3.2 The applicant submitted that they had so far classified ‘seat covers’ under the HSN 8708 at Serial No. 170 under Schedule IV of Notification No 1/2017-Central Tax (Rate) dt: 28.06.2017 with the applicable rate of CGST+SGST (14% +14%) amounting to 28%.
3.3 The applicant approached this authority seeking clarification regarding the competing entry at Serial No.211 of Notification No 1/2017-Central Tax (Rate) dt: 28.06.2017 under HSN 9401-Seats (other than those of heading 9402), whether or not convertible into beds, and parts thereof chargeable to GST at 28% upto 13.11.2017. However, the tax rate of said entry underwent a change vide Notification No.41/2017-Central Tax (Rate) dated 14.11.2017 reducing the tax rate to 18%.
3.4 The applicant claims that as the tax has been paid so far under HSN 8708, the benefit of reduction in rate of CGST/SGST will be applicable to the applicant if the correct classification is adopted.
4. Questions raised before the authority:
Whether the product namely ‘Car Seat Covers’ merits classification under HSN 9401? If not, what is the correct classification applicable to ‘Car Seat Covers’?
Is SI.No.435A of Schedule IV of the Notification No 1/2017-Central Tax (Rate) dt: 28.06.2017 applicable to ‘Car Seat Covers’? If not, what is the applicable entry under the said notification?
On Verification of basic information of the applicant, it is observed that the applicant falls under Central jurisdiction, i.e. Superintendent of Central Tax (CT), Hindupur-2 Range, Anantapur Division. Accordingly, the application has been forwarded to the jurisdictional officer and a copy marked to the State Tax authorities to offer their remarks as per Sec. 98(1) of CGST /APGST Act 2017.
In response, remarks were received from Central Tax officers concerned stating that no proceedings were lying pending or passed relating to the applicant on the issue, for which the Advance Ruling was sought by the applicant.
5. Applicant’s Interpretation of Law:
5.1. The product ‘car seat covers’ attracted a net rate of 28% (CGST+SGST) under both the competing entries (8708 and 9401) under Notification No 1/2017-Central Tax (Rate) dt: 28.06.2017 before amendment. The relevant entries and their respective tax rates before amendment are tabulated herein below:
