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TMI Blog2025 (1) TMI 615X X X X Extracts X X X X X X X X Extracts X X X X ..... The slack adjusters used in the braking system of Buses and Trucks supplied to both OEMs and aftermarket Sales are classifiable as 'Parts and accessories of motor vehicles of heading 8701 to 8705, ---Others' under HSN 87089900 and attracts GST at the rate of 28%. The slack adjusters used in the braking system of a Trailer supplied to OEMs and aftermarket Sales are classifiable as 'Parts and accessories of trailers' under 87169010 and attracts GST at the rate of 18%. Irrespective of nature of customers namely, OEMs or aftersales, and the HSN classification in the purchase orders received, the applicant should ensure to adopt correct classification of the product as the slack adjusters supplied are different for both 'buses trucks' application and 'trailer' application. Conclusion - The slack adjusters used in the braking system of 'Buses and Trucks' are classifiable as 'Parts and accessories of motor vehicles of heading 8701 to 8705---Others' under HSN 87089900 and attracts GST at the rate of 28%. The slack adjusters used in the braking system of Trailers' are classifiable as 'Parts and accessories of trailers' under 87169 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the replacement market through their vast and well spread distribution arrangement. Slack Adjusters under HSN code 87089900 charged at 28% is used for all Trucks Bus applications for both OE fitment and in the aftermarket. Slack Adjusters developed exclusively for trailer axle fitments are classified under HSN Code 87169010 charged at 18% for both OE fitment and for aftermarket requirements. The applicant enclosed copy of the purchase orders received from the OEM customers of Trucks Buses and Trailer axle manufacturers evidencing the HSN code with applicable GST. The same HSN code and the same GST rate is being used while supplying the above product to aftermarket. The applicant also provided the technical details showing key differences between the slack adjusters used in trucks buses and in the trailers as below provided to Sl.No. Features/Technical specifications Truck Bus applications Trailer Axle applications 1 Number of holes in the tail on the slack adjusters Only one hole is provided Multi holes are provided to suit mounting requirements 2. Mounting bracket on Axle Has only one set of holes and does not have return spring (has quick release valve to aid faster release of br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chanically propelled; parts thereof parts: Parts and Accessories of Trailers' under 87169010 at the rate of 18%. It was further informed that the applicant may be advised to continue the current classification based on distinct technical characteristics and end use of the slack adjusters and also advised to maintain documentary evidence such as purchase orders and product specifications. 6. PERSONAL HEARING Personal hearing was held on 26-09-2024. Shri. R. Balasubramanian, Senior DGM-Finance and Authorised Representative (AR) attended the hearing. He brought the two different types of 'Slack adjusters', one used in trucks buses and the other in Trailers. AR stated that the slack adjusters used for trucks and buses have only one hole. After, 2007, the applicant started to manufacture 'Automatic slack adjusters'. The applicant is still manufacturing the manual slack adjuster for aftermarket sales. These slack adjusters are charged at 28%. Another type is used exclusively in trailers axle installation which has three holes and used additional return spring for faster return of brakes. These types of slack adjusters are charged at 18%. AR requested AAR to clarify an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terpretative rules, Section notes, Chapter Notes supported by the Explanatory Notes to the HSN. The basic principle provided in Rulel is that the classification shall be determined according to the terms of the heading, Section and Chapter Notes. Further, Rule 3(a) of these rules provides that heading which gives most specific description shall be preferred to headings providing a general description. Chapter 87 is covered by Section XVII and as per 2(b) of the Section Notes, [Parts of general use' are to be excluded from this Section. Further note 3 of this Section provides that parts of Chapter 86 to 88 do not merit classification under these chapters, if the said parts are not suitable for use solely or principally with the articles of those chapters. 7.5. In the instant case, Slack adjuster is an essential part of a Air-braking system in Buses, Trucks or Trailers and shall not be treated as 'parts of general use'. Accordingly, it has to be classified as 'Parts and accessories of Motor Vehicles' under HSN 8708 and can be sub-classified under 87089900 as 'Others' chargeable @ 28%. 7.6. For correct classification of the slack adjusters for trailer appli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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