Disc brake pads classifiable as brakes and their parts; attracting 28% GST: AAR

Categories: Advance Ruling
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Facts: M/s. Brakes India Private Limited, is engaged in the manufacture of auto components viz., caliper brakes, drum brakes, actuation systems, disc brake pads, valves, rubber hose, ABS and brake fluid for light motor vehicles, S-cam brakes, Hydraulic drum brakes and Electro Magnetic Retarders for commercial vehicles and also Dry and Wet brakes for agricultural tractors. Disc Brake Pads contain two elements, i.e., one, the Disc Pad which is made of friction materials and the backing plate made of steel which is coated with an adhesive. These two elements when brought together, form what is referred to as the ‘Disc Brake Pads’.

Heading 8708 of Notification 1/2017 – Integrated Tax (Rate) dated June 28, 2017 (“GST Rate Notification”) covers “Parts and accessories of the motor vehicles of headings 8707 to 8705”, whereas Chapter Heading 6813 covers friction material and articles thereof, not mounted, fir brakes, for clutches or the like, with a basis of asbestos, of other mineral substances or of cellulose, whether or not combined with textiles or other materials.

Issues Involved: What is the appropriate classification of ‘Disc Brake Pads’ under GST – Tariff Heading 8708 attracting GST at 28% or Tariff Heading 6813 attracting GST Rate of 18%?

Held: The Hon’ble AAR of Tamil Nadu vide Order No. 7/AAR of 2018 dated August 30, 2018 observed that the Heading 8708 covers “Parts and accessories of the motor vehicles of headings 8707 to 8705”. Further, HSN Explanatory Notes to Heading 8708 states that parts and accessories of this heading include: H) Brakes (shoe, segment, disc, etc.) and parts thereof (plates’, drums, cylinders, mounted linings, oil reservoirs fir hydraulic brakes, etc.); servo-brakes and parts thereof.

Thus, it was held that from the above, it is evident that Friction Material in the form of “discs or pads “or any other form consisting of mineral materials with or without textiles manufactured and supplied by the Applicant are classified under Heading 87083000 and covered under SL. No. 170 of Schedule lV of GST Rate Notification and SL. No. 17O of Schedule lV of G.O. (Ms) No. 62 dated June 29, 2018 No. II(2)/CTR/ 532(d-4) / 2O17 attracting 14% CGST/ 14% SGST respectively.


Citation: [2018] 97 taxmann.com 453 (AAR – TAMIL NADU)