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2025 (6) TMI 915 - AAR - GSTClassification of goods - baby car seat - to be classified under 94018000 or to be classified as baby carriage and the HSN 87150010? - whether the product can be considered as Safety Equipment under accessory of vehicle and can be classified under the HSN Chapter 87089900? - applicability of entry 210A of N/N. 5/2024-Central Tax (Rate) dated 08th October 2024 - HELD THAT - The applicant is importing these baby chairs from Italy under HSN code 94018000 and that there is no dispute pending against them with the Customs Department as per the applicant. Further they are supplying the same to their customers under 9401800 and no dispute has been raised against them by the GST Department as per their submissions. The goods sold by the applicant are baby seats which are attached to the seat of a motor vehicle for safe carriage of the baby in the motor vehicle. Though they are designed specifically for use in a motor vehicle they cannot be classified under 94012000 as seats of a kind used for motor vehicles because these seats are not used for motor vehicles but are used in addition to the normal seats which are attached to a motor vehicle. Such seats are attached on to the already existing seats of a motor vehicle. The heading 94012000 covers the basic seats which are used for a motor vehicle whereas the goods in the instant case i.e. baby seats are not affixed to a motor vehicle and used as a primary seat. This is an additional special attachment which is affixed to the seat of a motor vehicle for safe carriage of the baby while driving the vehicle. The applicant has raised an apprehension that the said baby seats can be classified under 87150010 as baby carriage or under 878089900 as a safety equipment under accessory of vehicle. Baby carriage under 87150010 covers carriages whether or not folding fitted with two or one wheels and generally pushed by hand (push-chairs perambulators strollers etc). Since in the instant case the baby seats do not come with wheels and are not meant for carriage of babies by generally pushing by hand the said seats cannot be classified as carriage under 87150010 - the baby seats are more specifically covered under chapter 94 as Seats and therefore by way of the said exclusion. With reference to the applicability of entry 210A of Notification No.5/2024 Central Tax (Rate) dated 8.10.2024 it is found that the said entry covers Tariff item 94012000 i.e. seats of a kind used for motor vehicles. It is already discussed hereinabove that the goods i.e. baby seats are classified under 94018000 and therefore the said notification would not be applicable to the subject goods i.e. baby seats supplied by the applicant. Conclusion - i) The product namely baby car seat is correctly classified under 94018000. ii) The entry 210A of Notification No. 5/2024 Central Tax (Rate) dated 08th October 2024 is not applicable on applicant.
The core legal questions considered by the Authority for Advance Ruling (AAR) in this case are:
1. Whether the product described as a baby car seat is correctly classified under HSN code 94018000 (other seats under Chapter 94). 2. If not classified under 94018000, whether the product can alternatively be classified as: a) A baby carriage under HSN 87150010 (Chapter 87 covering vehicles and parts thereof), or b) Safety equipment as an accessory of a vehicle under HSN 87089900 (parts and accessories of motor vehicles under Chapter 87). 3. Whether entry 210A of Notification No. 5/2024-Central Tax (Rate) dated 8th October 2024, which pertains to seats of a kind used for motor vehicles under HSN 94012000, is applicable to the applicant's product. Issue-wise Detailed Analysis: Issue 1: Classification under HSN 94018000 Relevant Legal Framework and Precedents: The classification of goods for GST purposes is governed by the Customs Tariff Act, 1975, and the Central Goods and Services Tax Act, 2017. The General Rules for Interpretation of the Harmonized System (HSN) and the Customs Tariff Act's First Schedule, including Section and Chapter Notes, apply. The Supreme Court has recognized the persuasive value of the HSN Explanatory Notes in classification disputes. Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 specifies GST rates applicable to various HSN codes. Court's Interpretation and Reasoning: Chapter 94 covers furniture and seats, including "Seats (other than those of heading 9402), whether or not convertible into beds." Heading 9401 specifically includes seats, with subheading 94018000 covering "Other seats." The applicant's product is a baby car seat that is detachable, fixed over the existing car seat without structural modification, and designed solely for the safety and comfort of children during travel. The AAR noted that while the product is designed for use in motor vehicles, it is not a primary seat of the vehicle but an attachment. The subheading 94012000 covers seats of a kind used for motor vehicles, which are integral seats. The baby car seat is removable and supplementary, aligning it more closely with "other seats" under 94018000. The HSN Explanatory Notes expressly include safety seats suitable for infants and toddlers in motor vehicles under subheading 94018000, describing them as removable and attached by seat belts or tether straps. This aligns precisely with the product in question. Key Evidence and Findings: The applicant's product descriptions and leaflets confirm that the baby seats are designed for children's safety, are removable, and are attached to the vehicle's existing seats. The product is imported under HSN 94018000 with no customs dispute. The GST department has not raised any objections to this classification. Application of Law to Facts: Applying the Customs Tariff Act's First Schedule and HSN Explanatory Notes, the product fits squarely within subheading 94018000 as "other seats" designed for infants' safety in motor vehicles. The product is not a primary motor vehicle seat (94012000), nor is it a baby carriage or vehicle accessory. Treatment of Competing Arguments: The applicant argued for classification under 94018000 primarily, with alternative classification under 87150010 or 87089900 if the first is rejected. The jurisdictional officer contended that the product is a seat used in motor vehicles and thus should be classified under 94012000, invoking Notification No. 5/2024 which applies a 14% GST rate to that code. The AAR rejected this, distinguishing the product as an attachment and not a motor vehicle seat itself. The officer's alternative classification under Chapter 87 was also rejected, as baby carriages under 87150010 require wheels and are pushed by hand, which the product lacks. Accessories under 87089900 are excluded if more specifically covered elsewhere, which applies here. Conclusion: The baby car seat is correctly classified under HSN 94018000 as an "other seat" within Chapter 94, attracting GST at 18% as per the relevant notification. Issue 2: Alternative Classification as Baby Carriage (HSN 87150010) or Vehicle Accessory (HSN 87089900) Relevant Legal Framework and Precedents: Chapter 87 covers vehicles and parts/accessories. Heading 8715 includes baby carriages and parts thereof. Heading 8708 covers parts and accessories of motor vehicles. Section Notes to Section XVII (covering Chapter 87) exclude parts and accessories covered more specifically elsewhere. Court's Interpretation and Reasoning: The applicant argued that if the product is not under 94018000, it could be a baby carriage (87150010) or vehicle accessory (87089900). However, the product lacks wheels and is not designed to be pushed by hand, which is essential for classification as a baby carriage. Regarding vehicle accessories, the product is more specifically covered under Chapter 94 as a seat, and thus excluded from Chapter 87 classification by Section Notes. Key Evidence and Findings: The product's design and usage confirm it is a detachable seat for children's safety in cars, without wheels or hand-push capability. It is not an integral vehicle part but an attachment. The Section Notes exclude classification under Chapter 87 if goods are covered more specifically elsewhere. Application of Law to Facts: The product does not meet the criteria for baby carriages under 87150010 nor is it an accessory under 87089900 due to specific exclusion by Section Notes and more precise classification under Chapter 94. Treatment of Competing Arguments: The applicant's alternative arguments were considered but rejected based on the product's characteristics and Section Notes. The jurisdictional officer's reliance on Chapter 87 classifications was also dismissed. Conclusion: The product cannot be classified as a baby carriage under 87150010 nor as a vehicle accessory under 87089900. Issue 3: Applicability of Notification No. 5/2024-Central Tax (Rate), Entry 210A Relevant Legal Framework: Notification No. 5/2024-Central Tax (Rate) dated 8th October 2024 introduced entry 210A in Schedule IV, applying a 14% GST rate to "Seats of a kind used for motor vehicles" under HSN 94012000. Court's Interpretation and Reasoning: Since the baby car seat is classified under HSN 94018000 and not 94012000, the notification entry 210A does not apply. The product is not a seat of a kind used for motor vehicles but an additional seat attached to motor vehicle seats. Key Evidence and Findings: The product's detachable nature and classification under 94018000 exclude it from the scope of entry 210A. Application of Law to Facts: The notification's applicability is strictly linked to HSN 94012000, which does not cover the applicant's product. Treatment of Competing Arguments: The applicant contended non-applicability of the notification, which was upheld. The jurisdictional officer's attempt to classify the product under 94012000 to attract the notification was rejected. Conclusion: Entry 210A of Notification No. 5/2024 is not applicable to the applicant's product. Significant Holdings: "This sub-heading also covers safety seats suitable for use for the carriage of infants and toddlers in motor vehicles or other means of transport. They are removable and are attached to the vehicle's seats by means of the seat belt and a tether strap." "Though, they are designed specifically for use in a motor vehicle, they cannot be classified under 94012000 as seats of a kind used for motor vehicles because these seats are not used for motor vehicles but are used in addition to the normal seats which are attached to a motor vehicle." "Parts and accessories, even if identifiable as for the articles of this Section are excluded if they are covered more specifically, by another heading elsewhere in the Nomenclature." "Since the goods i.e. baby seats are classified under 94018000 and therefore, the said notification [No. 5/2024] would not be applicable to the subject goods." Core Principles Established: - Classification of goods must follow the most specific description as per the General Rules for Interpretation of the HSN. - Safety seats for infants and toddlers that are removable and attached to existing motor vehicle seats are classified under HSN 94018000 as "other seats" under Chapter 94. - Products more specifically covered under one chapter cannot be classified under Chapter 87 as parts or accessories. - Newly introduced GST rate notifications apply strictly according to HSN codes and do not extend to goods classified under other codes. Final Determinations: 1. The baby car seat is correctly classified under HSN 94018000. 2. Classification under HSN 87150010 (baby carriage) or HSN 87089900 (vehicle accessory) is not applicable. 3. Entry 210A of Notification No. 5/2024-Central Tax (Rate) dated 8th October 2024 is not applicable to the applicant's product.
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