Floor mats for four-wheelers to attract 28% GST, says Gujarat AAR

The applicant, a manufacturer, had argued that 18% GST should be applicable

Floor mats, made of PVC leather mixed with other substances, for four-wheelers will attract 28 per cent Goods and Services Tax (GST), the Authority for Advance Rulings (AAR) of Gujarat has ruled.

The ruling was given on an application filed by Autotech, a proprietary concern that manufactures and supplies floor mats for four-wheelers.

The applicant had inferred that the product would draw 18 per cent GST since it is an admixture of PVC leather, PU foam and XLPE foam, bound together by using a cotton thread and adhesive, consequent to which a heel pad is affixed.

According to the company, the product should be classified either under the heading 3918 (floor coverings of plastic) or 3904 (PVC not mixed with any other substance), which draw 18 per cent GST.

The company cited various court orders to support its point.

The GST rates are based on the classification of a product in a harmonised system of nomenclature (HSN) codes.

The AAR, however, observed that since 3904 clearly provides that it covers PVC items not mixed with any other substance, the product does not fall in this category. The product also does not fall under 3918 as it covers within its ambit floor wall and ceiling coverings of plastics, the AAR said.

It ruled that the product comes under 8708, which covers parts and accessories of motor vehicles subject to certain conditions. This classification draws a GST of 28 per cent.

The authority went by the principle laid down by a note of HSN, which says that when a part or accessory can fall in more than one code, the final classification is determined by its sole or principal use.

Sandeep Sehgal, partner Tax, AKM Global, a tax and consulting firm, said the AAR has applied the general rule of the classification, which goes by its sole or principal use. Applying that rule, the product is part and accessories of motor vehicles, he said.