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February 17, 2025

Viraaj Vashishth

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Trailers (8716) HSN Code and GST Rate

Logistics is an important industry that has a strong reliance on the transportation industry, and the mobility of goods across various places relies heavily on trailers. In India, trailers fall under the category of HSN Code 8716 which encompasses different kinds of trailers and semi trailers. For the companies that manufacture, trade, or even use these trailers, knowing the 8716 HSN code GST rate is vital as it affects the taxation procedures and compliance with the GST law.

What is a 8716 commodity code?

The commodity code 8716 falls under chapter 87 of the Harmonization System of Nomenclature (HSTN), which covers various categories of vehicles and their accessories. This group includes all non motorized propelled vehicles such as trailers, semi trailers and all other similar vehicles made for transporting goods. Classifying trailers under HSN Code 8716 simplifies the tax system for both new and used trailers in India.

You Should Also Read: GST on Used Cars

8716 HSN Code Description

Most trailer and semi trailer vehicles under the 8716 HSN code are divided into certain classes depending on their purpose, type and other features. Some of the common types of trailers included in this classification are:

1. Flatbed Trailers: These trailers are used for transporting heavy machinery, vehicles, or bulk cargo.

2. Tanker Trailers: These are used for shipping liquid, chemical, or fuel products.

3. Tipper Trailers: Primarily used in construction for transporting sand, gravel, and other materials.

4. Refrigerated Trailers: These trailers are for the transport of goods like food items and pharmaceuticals that may perish.

5. Container Trailers: These are built to transport shipping containers over long distances.

The classification of HSN cares about compliance standards being across the board for all tax deprived businesses.

GST Rate for HSN Code 8716

The GST rate for trailers coded under HSN 8716 is determined by the specific class and use of the trailer. The following table summarizes the GST rates:

HSN Code	Description	Rate (%)
8716	Trailers And Semi-Trailers; Other Vehicles, Not Mechanically Propelled; Parts Thereof	5/18
87161000	Trailers And Semi-Trailers; Other Vehicles, Not Mechanically Propelled; Parts Thereof Trailers And Semi-Trailers Of The Caravan Type, For Housing Or Camping	5/18
87162000	Trailers And Semi-Trailers; Other Vehicles, Not Mechanically Propelled; Parts Thereof Self-Loading Or Self-Unloading Trailers And Semi-Trailers For Agricultural Purposes	5/12
87163100	Trailers And Semi-Trailers; Other Vehicles, Not Mechanically Propelled; Parts Thereof Other Trailers And Semi-Trailers For The Transport Of Goods : Tanker Trailers And Tanker Semi-Trailers	5/18
87163900	Trailers And Semi-Trailers; Other Vehicles, Not Mechanically Propelled; Parts Thereof Other Trailers And Semi-Trailers For The Transport Of Goods : Other	5/18
87164000	Trailers And Semi-Trailers; Other Vehicles, Not Mechanically Propelled; Parts Thereof Other Trailers And Semi-Trailers For The Transport Of Goods : Other Trailers And Semi-Trailers	5/18
871680	Other Vehicles	5/12
87168010	Trailers And Semi-Trailers; Other Vehicles, Not Mechanically Propelled; Parts Thereof Other Vehicles Hand Propelled Vehicles (E.G. Hand Carts, Rickshaws And The Like)	5/18
87168020	Trailers And Semi-Trailers; Other Vehicles, Not Mechanically Propelled; Parts Thereof Other Vehicles Animal Drawn Vehicles	5/18
87168090	Trailers And Semi-Trailers; Other Vehicles, Not Mechanically Propelled; Parts Thereof Other Vehicles Other	5/18
871690	Parts	5/18
87169010	Trailers And Semi-Trailers; Other Vehicles, Not Mechanically Propelled; Parts Thereof Parts : Parts And Accessories Of Trailers	5/18
87169090	Trailers And Semi-Trailers; Other Vehicles, Not Mechanically Propelled; Parts Thereof Parts Other	5/18

All other standard purpose trailers and semi-trailers usually attract an 18% GST, but agricultural trailers have a supporting tax of 12% GST to cater for the farming industry.

Effects of GST on the Trailer Sector

There have been several notable changes in the trailer segment as a result of the Goods and Services Tax (GST) implementation in India:

1. Simplification of Tax System: The GST has eliminated the numerous indirect taxes which have helped unify the taxation system for the trailers and semi-trailers.

2. Lowered Costs for Logistics: There is more efficiency in interstate transport as there is only one tax system across the country hence it reduces logistical delays.

3. Availability of Input Tax Credit (ITC) on Purchases: Companies that acquire trailers for a business purpose can use the ITC which decreases their tax liability.

Despite the benefits, challenges are posed by the cost impact from the 18% GST that small businesses and buyers of second hand trailers will face with the 8716 HSN code GST rate.

Second-Hand Trailers and GST Implications

For second hand trailers, whether GST is applicable depends on if the seller is GST registered and how the trailer is sold. Generally, the following scenarios apply:

1. Registered Dealers: A registered dealer selling a used trailer will be subject to GST at the applicable rate which is 18%, or 12% depending on the usage.

2. Unregistered Individuals: When one individual sells a second hand trailer to another individual without using any form of business structures, GST will not apply.

The GST on used trailers is levied under the Margin Scheme, which taxes only the profit margin instead of the whole value of the trailer, easing the financial strain on the clients.

You Should Also Read: GST rates and HSN code 8512 for Electrical Lighting Equipment

Compliance and GST Filing for Trailers

Companies that sell trailers categorized under HSN Code 8716 must abide by the bestowed GST requirements which entail:

1. Proper Invoice Documentation: All sales must be issued a GST compliant invoice which incorporates the HSN code 8716 along with the corresponding GST rate.

2. Regular GST Returns: Trailer sales should be reported in the monthly or quarterly GST filings to recover Input Tax Credit.

3. E-Way Bills for Transport: E-way bill is compulsory for movements that are more than 50,000 rupees and if trailers are moved between states even those, over Rs. 50,000 in value.

Conclusion

The utilization of the 8716 HSN code has wide-reaching effects on financing, selling, and purchasing, especially in the antithetical trailer market. The general GST rate is 18%, however a preferential rate of 12% is given to agricultural trailers. This is meant to support the agricultural sector. People who buy second hand trailers should be mindful of the taxes that come with these transactions, taxation under margin GST requires effort to follow. Following the GST laws prevents businesses from being penalized and enables them to benefit from the simplified taxation system that has been adopted through GST.

FAQs

1. What is the 8716 HSN code?

The code 8716 HSN is for trailers, semi-trailers, and other types of non-motorized vehicles in India under the GST system.

2. What is the GST rate for 8716 HSN codes?

According to the Indian government, the GST rate under the 8716 HSN code is 18% for most trailers while 12% is the rate for agricultural trailers.

3. What is the 8716 HSN code description?

The description for the 8716 HSN code includes items such as flatbed trailers, tipper trailers, and tanker trailers which are designed for conveying goods as trailers and semi-trailers.

4. How does GST apply to second hand trailers under 8716 HSN code?

Under HSN code 8716, secondhand trailers are generally sold under the margin scheme whereby GST is applicable on the profit margin from stamp duty.

5. What is an 8716 commodity code?

The 8716 commodity code is for standardization of taxation and trade regulations for trailers and other associated transportation equipment.

6. Does any part of the trailer under 8716 HSN code qualify for GST exemption?

There are no complete exemptions, but agricultural trailers under HSN code 8716 have a lesser GST rate of 12% than 18%.

7. Are the trailers for personal application included under 8716 HSN code?

Yes, trailers are categorized as for commercial or personal use and they fall under 8716 with the appropriate GST classification.

8. How do I know what is the correct GST percentage to apply for a trailer under 8716 HSN code?

Depending on whether the trailer in question is for general transportation (GST 18%) or agricultural use (GST 12%) determines the tax percentage under 8716 HSN code.

9. Is an e way bill a requirement for the movement of Travelers falling under 8716 HSN code?

Yes, e-way is mandatory for products that go beyond the value of Rs.50,000. It is equally important to note that the e-way is only valid for the interstate movement of goods under 8716 HSN code.