It was observed that these seat covers, while enhancing functionality and protection, remain an integral part of the seat assembly rather than mere accessories as they were designed in line with the car’s safety guidelines

Recently, the Andhra Pradhesh bench of the  Appellate Authority for Advance Ruling (AAAR) held that 28% GST is applicable on car seat covers if they serve the function of an essential and integral part of the seat’s assembly. The case involves the appellant, Saddles International Automotive & Aviation Interiors Private Limited, who sought an advance ruling on the classification of original seat covers supplied to Original Equipment Manufacturers (OEMs) under the GST regime. The Appellant is engaged in the business of manufacture and supply of car seat covers, car accessories, engineer design services, graphic design services, etc. Get a Copy of GST Ready Reckoner – Click here The seat covers in question are made of fabric or Polyurethane (PU) which are designed to permanently fit over the raw foam seat installed in the car and become an integral part of the car seats. The original seat covers are supplied to OEMs and seat manufacturers on contract basis, who further supply the original seat covers to OEMs for permanent affixation over the raw foam seat which is ultimately sold with the motor vehicles. The primary  issue put forward by the appellant  was whether these seat covers should be classified under  HSN 9401 as “ Seats (other than those of heading 9402) whether or not convertible into beds, and parts thereof other than seats of kind used for aircraft” , which attracts 18% GST rate, or under Chapter Heading 8708 as “Parts and accessories of the motor vehicles of headings 8701 to 8705 [other than specified parts of tractors]” which attracts a 28% GST rate. Get a Copy of GST Ready Reckoner – Click here The Advance Ruling Authority (AAR) ruled that the original seat covers should be classified under Chapter Heading 8708, thereby attracting a GST rate of 28%. Aggrieved by the impugned order, the appellant moved against the decision before the AAAR. After examining the facts of the appeal, the AAAR bench of  Mr Sanjay Pant and Mr Girija Shankar also held that the seat covers were indeed essential components of the car seats, permanently attached and integral to the seat assembly. The distinction between “parts” and “accessories” was examined, and it was concluded that these seat covers, while enhancing functionality and protection, remain an integral part of the seat assembly rather than mere accessories as they were designed in line with the car’s safety guidelines. In light of the observations made it was obvious that the seats attracted the higher GST rate, ie, 28% rate. In result, the ruling passed by the AAR was upheld.