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Viraaj Vashishth

September 30, 2024

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Repair and Maintenance HSN Code - 9987

Service taxonomy is the main factor that needs the utmost attention concerning the legislature related to the Goods and Services Tax System in India. The HSN code is essential for this taxation classification. The repair or maintenance of goods and services entails that the HSN code in that respect is 9987. This paper seeks to fully elaborate on the 9987 HSN Code, the repercussions, and the ways that businesses can be compliant with the GST regulations.

9987 HSN Code Description

HSN Code 9987 encompasses the services undertaken for general repair and maintenance of machinery, equipment or other goods and devices. This includes a range of activities such as mechanical repairs such as electrical repairs and maintenance services. The classification facilitates the reverse application of that mentioned above for purposes of applying the appropriate GST rate and ensuring that businesses comply with the VAT as applicable. Here’s a detailed look at what this code covers:

Categories Under HSN Code 9987

Under the code primarily the services of mechanical and electrical repairs and maintenance of machinery, installations and vehicles are covered. This comprehensive classification guarantees that all the relevant portions of the services rendered fall under one tax regime. HSN Code 9987 is sub-classified based on the broad category of repair and maintenance services rendered:

1. 99871 – This includes services for the repair and maintenance of machinery and equipment.

2.99872 – Such services include electrical and electronic repairs.

3. 99873 – Motor vehicle and other goods mechanical repairs.

Each subcategory has a specific implication on the compliance requirements of the GST rates. Take for example mechanical repair and electronic equipment repair; there are varied taxation implications between the two.

Sub-Category	Description
99871	Repair and maintenance of machinery and equipment.
99872	Repair services for electrical and electronic equipment.
99873	Mechanical repair services for vehicles and goods.

Regarding Taxation for HSN Code 9987

Different GST rates apply to services rendered under HSN code 9987 based on the particular subcategory referred to. Generally, mechanical repair services are charged 18% GST, whereas electrical and electronic repair services can also be under this rate but certain conditions will be affecting their specific tax rate. For instance:

Sub-Category	Description	Rate (%)	CESS (%)	Effective Date	Rate Revision
99871	Repair and maintenance of machinery and equipment.	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
99872	Repair services for electrical and electronic equipment.	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
99873	Mechanical repair services for vehicles and goods.	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998713	Maintenance And Repair Services Of Computers And Peripheral Equipment	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998714	Maintenance And Repair Services Of Transport Machinery And Equipment	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998715	Maintenance And Repair Services Of Electrical Household Appliances	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998716	Maintenance And Repair Services Of Telecommunication Equipments And Apparatus	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998717	Maintenance And Repair Services Of Commercial And Industrial Machinery.	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998718	Maintenance And Repair Services Of Elevators And Escalators	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998719	Maintenance And Repair Services Of Other Machinery And Equipments	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998721	Repair Services Of Footwear And Leather Goods	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998722	Repair Services Of Watches, Clocks And Jewellery	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998723	Repair Services Of Garments And Household Textiles	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998724	Repair Services Of Furniture	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998725	Repair Services Of Bicycles	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998726	Maintenance And Repair Services Of Musical Instruments	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998727	Repair Services For Photographic Equipment And Cameras	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998729	Maintenance And Repair Services Of Other Goods N.E.C.	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998731	Installation Services Of Fabricated Metal Products, Except Machinery And Equipment.	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998732	Installation Services Of Industrial, Manufacturing And Service Industry Machinery And Equipment.	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998733	Installation Services Of Office And Accounting Machinery And Computers	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998734	Installation Services Of Radio, Television And Communications Equipment And Apparatus.	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998735	Installation Services Of Professional Medical Machinery And Equipment, And Precision And Optical Instruments.	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998736	Installation Services Of Electrical Machinery And Apparatus N.E.C.	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%
998739	Installation Services Of Other Goods N.E.C.	5/18	Nil Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly or indirectly related to any of the events under FIFA U-17 Women's World Cup 2020. Provided that credit of input tax charged on goods and services has not been taken [Please refer to Explanation no. (iv)].	01/04/2020 25/01/2018	5% 5% 18%

Companies should be able to assess the exact rate that applies based on the nature of the service rendered to eliminate the filing of taxes.

Assessment of Input Tax Credit (ITC) Eligibility

Concerning taxation services provided, businesses providing repair and maintenance services are also eligible for Input Tax Credit (ITC). However, certain conditions must be satisfied to be able to claim ITC:

1. Proper Documentation: Businesses must avail of supporting documents such as invoices concerning their claims of ITC.

2. Relevance of Inputs: Such business inputs must border on repair and maintenance services only.

Reverse Charge Mechanism (RCM)

Under certain circumstances, such as when services are offered by unregistered dealers, the Reverse Charge Mechanism (RCM) comes into play. Under this mechanism, the recipient of service assumes tax liability, pays GST and can claim its input if applicable. For example, An example of this is when an unregistered dealer provides repair services to a registered business.

Case Studies and Examples

Illustrative Example 1: Mechanical Repair Services

A Company that is engaged in the business of rendering mechanical repair services on industrial machinery would put these services under 99871. This study has a guideline of 18% owe that tax as value-added tax. In turn, the company is required to prepare the correct tax invoices about the HSN code and the rate issued by them.

Illustrative Example 2: IT Equipment Maintenance

The maintenance service of electronic equipment qualifies to be under 99872 such as an IT services provider. The GST rate for such services is also 18 per cent. Proper records and compliance constraints on invoices should be observed to meet GST requirements.

Impact on Impact on Different Industries

Sector-Specific Analysis

From the impact of 9987 HSN code on manufactured goods or IT services one can learn the lesson of accurate and perfect categorization. Automotive repair shops for instance have a lot of mechanical repair work and therefore need to know 99873-classification about repair of vehicles.

Conclusion

In short, it can be concluded that the 9987 HSN code is significant in the GST system of repair and maintenance services. There has to be accurate classification, knowledge of relevant GST rates, and relevant documentation to comply. More than anything, however, businesses will need to be anticipatory about regulation changes and guarantee that all conditions are satisfied with them in the context of accounting for taxes.

FAQs

1. What falls under the 9987 SAC Code/HSN Code?

9987 HSN code is related to the repair and maintenance services. This code classifies and employs tax laws about the GST system in India. It includes various services which are connected to the repair and maintenance of machinery, equipment, and other goods.

2. What are the types of HSN codes for repair and maintenance and the HSN codes of services associated with them?

The 9987 HSN is further sub-categorized and cites three codes with specified categories namely: 99871-mechanical repair, 99872-electrical repair and 99873 vehicle maintenance.

3. What is the GST rate for the services hitherto under the 9987 HSN code?

9987 HSN code also has some lower 9 digit HSN code which relates to the digits of 9987 HSN code and services issued under this code attract a GST rate of 12% or 18% based upon the reported activity.

4. Can input tax credit (ITC) be claimed on services under HSN code 9987?

Yes, an Input Tax Credit is available on purchases relating to the services under HSN code 9987, provided there is adequate evidence and GST provisions are satisfied.

5. For billings about services under the repair and maintenance HSN code, what invoice should be issued?

For the services falling under the head 9987, it is mandatory to have the HSN code and GST rates with the service descriptions properly documented for acceptance.

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