Classification of Disc-Pads / Brake-Pads under GST

Introduction

Disc-pads and brake-pads are essential components of any automobile. They are subject to wear and tear and require periodic replacement. The classification of these items under GST has been a matter of debate and discussion. In this article, we will explore the classification of disc-pads/brake-pads under GST and the applicable tax rates.

Classification of Disc-Pads/Brake-Pads under GST

Disc-pads and brake-pads fall under the category of “parts and accessories suitable for use solely or principally with a particular kind of machine or apparatus” (HSN Code 8708). These items are classified under SAC (Service Accounting Code) 9987 which covers “maintenance and repair services of motor vehicles including two wheelers and three wheelers”.

As per Notification No. 1/2017-Central Tax (Rate) dated 28th June 2017, the rate of GST applicable on the supply of services of maintenance and repair of motor vehicles (including two wheelers and three wheelers) is 18% (9% CGST + 9% SGST/UTGST or 18% IGST).

Applicable Tax Rates

The applicable tax rate on disc-pads/brake-pads can be classified into two categories:

1. Supply of Disc-Pads/Brake-Pads as Goods

If disc-pads/brake-pads are supplied as goods, they fall under HSN Code 8708 and attract a GST rate of 28% (14% CGST + 14% SGST/UTGST or 28% IGST) as per Notification No. 1/2017-Central Tax (Rate) dated 28th June 2017.

2. Supply of Disc-Pads/Brake-Pads as Part of Maintenance and Repair Services

When disc-pads/brake-pads are supplied as part of maintenance and repair services of motor vehicles (including two wheelers and three wheelers), they are classified under SAC 9987 and attract a GST rate of 18% (9% CGST + 9% SGST/UTGST or 18% IGST) as per Notification No. 1/2017-Central Tax (Rate) dated 28th June 2017.

Conclusion

The classification of disc-pads/brake-pads under GST is quite straightforward. If they are supplied as goods, they attract a GST rate of 28%. However, when they are supplied as part of maintenance and repair services of motor vehicles, they attract a lower tax rate of 18%. It is important for businesses dealing in disc-pads/brake-pads to be aware of the applicable GST rates to ensure compliance with the GST regulations.