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The Applicant had sought an advance ruling before the Andhra Pradesh AAR to ascertain the classification of ‘car seat covers’ under CTH chargeable to CTH 8708 chargeable to 28% GST or under CTH 9401 chargeable to 18% GST. The Applicant submitted that the 'seat covers' were rightly classifiable under CTH 9401 as the 'seat covers' are an essential and integral 'part of seats, without which 'seat' can be rendered dysfunctional.
The AAR observed that CTH 9401 covers Seats and parts thereof. Referring to the definition of the term ‘part’, the AAR observed that 'parts' combine to form a whole and they are integral to the completion of any article or equipment. Further, the term ‘accessories’ means an object or device that is not essential in itself but adds to the beauty, convenience, or effectiveness of something else. Basis the definitions, it had been observed that seat covers cannot be a part of seats by any means in the instance case. They are meant for the protection of the seats and the functional value of seat covers, is the comfort and convenience it extends to the driver and the passengers. Thus, the 'seat covers' are not essential parts of the seats but accessories that enhance their functional value.
The AAR further relied upon CBEC Circular No. 541/37/2000-CX dated 16 August 2000, wherein it had been clarified that car seat covers are classified under CTH 8708. In view of the above observations, the AAR ruled that car seat covers merit classification under CTH 8708 chargeable to 28% GST.
Saddles International Automotive and Aviation Interiors Private Limited [AAR No. 15/AP/GST/2021 dated 21 June 2021]
The AP AAR has correctly interpreted the term ‘parts’ in as much as the seat cover is an accessory to the automotive vehicle and not the car seats or its parts as the seats are complete in themselves even without such covers. It would be pertinent to note that is a similar ruling, the Gujarat AAR in the case of Shiroki Technico India Private Limited [2021-TIOL-11-AAR-GST], had held that Seat Adjusters are classified under CTH 8708 as it does not give any shape or structure to the seat but merely helps the seat to slide back and forth as per the convenience/requirement or comfort of the driver or passenger.
The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.
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