Karnataka AAR Clarifies GST Rate on Parts of Motor Vehicle Seats

The applicant in present case had submitted Form GST ARA-01 on 20/01/2025 after payment of stipulated fees of Rs. 5,000 each in terms of CGST and KGST. The question raised was the classification and rate of GST to be charged on different components of seats of a type used for motor vehicles, i.e., seat cushion shields, back lock strikers, armrest plates, reclining adjuster handles, and other sub-assemblies for sole use by OEM.It was submitted that entry 435A of Notification No. 1/2017-Central Tax (Rate) covered “seats and parts thereof” at 18%.

Thereafter, Notification No. 5/2024-Central Tax (Rate) of 08/10/2024 added a new entry 210A into Schedule IV, making a rate of 28% GST on “seats of a kind used for motor vehicles” (HSN 9401 20 00), and the entry 435A remained to be applied to “parts thereof.” CBIC Circular No. 235/29/2024 of 11/10/2024 clarified this difference. A personal hearing was conducted on 05/06/2025.

Issue Raised before AAR: Whether “parts of seats of a kind used for motor vehicles” would fall under the new added entry 210A at 28% GST rate or continue to fall under entry 435A at 18%.

AAR’s Findings & Decision: The Authority noted tariff heading 9401, the relevant Notifications, and Circular. It noted that whole motor vehicle seats (HSN 9401 20 00) now come under entry 210A of Schedule IV and are charged GST at 28%.However, “parts of seats” remain classifiable under tariff item 9401 90 00 and continue under entry 435A of Schedule III, taxable at 18%.

Under Section 98(4) of the CGST Act, 2017 and Section 98(4) of the KGST Act, 2017, that the Seats of a kind used for motor vehicles attract GST at 28% under entry 210A, whereas the Parts of such seats remain taxable at 18% under entry 435A.

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