The Authority for Advance Rulings (AAR), Andhra Pradesh bench has held that the car seat covers would attract a higher tax rate of 28% GST.
The bench comprising Members Mr. D Ramesh and Mr. Syam Sunder was considering an application filed by M/s. Saddles International Automotive & Aviation Interiors Private Limited is 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 bench held that the terms i.e., ‘parts, and ‘accessories’, ‘seat covers’ cannot be a part of seats by any means in the instant 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. Even in general trade parlance or in terms of their specific usage, the seat covers, are considered as accessories and customized as per the preferences of the clients,” the bench said.
It was further pointed out that the trade circles consider automotive accessories as a category of articles relating to non-essential automotive parts which embellish the look and feel of an automobile or add functionality.
“’seat covers’ provide a new look to the interior of the car, and also make it more comfortable for passengers. It is pertinent to mention in this context that seat covers were covered under ‘accessories’ in the pre-GST regime too. car seat covers were classified under heading 87 08 as accessories,” the bench said.
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