In re Gubbi Rajashekarappa Mahesh (GST AAR Karnataka)
This case involves an application for an advance ruling filed by Sri Gubbi Rajashekarappa Mahesh of M/s. Fine Tools (India) Pvt. Ltd. The company manufactures and supplies various sub-assemblies and parts used in motor vehicle seats, such as springs, fasteners, and metal stampings. The applicant sought clarification on the correct classification of these goods and the applicable GST rate. The core of the issue was to determine whether these parts should be taxed at 18% or 28%.
The applicant argued that the GST rate on parts of motor vehicle seats should be 18%. This was based on amendments to GST notifications. The company referenced Notification No. 1/2017-Central Tax (Rate), as amended, which established a new entry (210A) in Schedule IV for “Seats of a kind used for motor vehicles,” attracting a 28% GST rate. However, the applicant pointed out that the new entry for the 28% rate did not explicitly include “parts thereof.” In contrast, the amended entry (435A) in Schedule III, which covers a broader category of seats and parts, continued to include “parts thereof,” and was taxed at 18%. The applicant therefore contended that while complete motor vehicle seats were moved to the 28% tax bracket, the parts remained under the 18% rate.
