Conference Call - HS Classification of parts & accessories of motor vehicles

September 2019

Date: 19th September 2019
Time: 4:00 pm – 5:00 pm
Classification of vehicle parts & accessories has remained one of the most intriguing yet fascinating topics of discussion. As complicated as vehicle classification can be, however, it's usually much easier than trying to classify parts and accessories for them.

Though Chapter Heading 8708 reads “parts and accessories of the motor vehicles of headings 8701 to 8705”, it does not cover all such parts. However, the usual stand of the tax authorities while assessing parts & accessories of motor vehicles is that these are all classifiable under Chapter Heading 8708.

It is interesting to note that for motor vehicles parts & accessories to be classified under Chapter Heading 8708, they (i) must not be excluded by Note 2 to Section XVII; (ii) must be suitable for use solely or principally with the articles of Chapter 86 to 88; and (iii) must not be more specifically included elsewhere in the nomenclature.

But as easy as these concepts may sound, these are often mis-understood by the taxpayers and tax authorities alike. For e.g., some automotive parts and accessories which are specifically provided for in other Chapters may still be classifiable in Chapter Heading 8708, if they are excluded by other Section or Chapter Notes.

Again, certain parts which are expressly excluded by Note 2 to Section XVII have been held to classifiable under CTH 8708 by Supreme Court applying the test of principal use. Therefore, one not only has to be aware of Section XVII Notes, but those of other Sections and Chapters that might apply and the Courts decisions.

Chapter 39, for example, has a Note which excludes parts of vehicles of Section XVII. Consequently, a plastic hose or tube which is a finished auto part would go under 8708 rather than 3917 which is a specific provision.

To streamline the assessment of parts & accessories of automobiles, the Office of Commissioner of Customs, Mumbai recently issued a “Note on the classification of parts and accessories of Motor Vehicles”. But has the note really clarified the situation or potentially paved way for further confusion?

Lakshmikumaran & Sridharan (L&S), in its endeavour to keep all its clients updated, is organizing a conference call to discuss these issues and even more. Mr. P. Sridharan, Partner, Lakshmikumaran & Sridharan will be the speaker in this conference call.