HSN classification Post 56th GST Council meeting

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Sharanagouda (Querist)
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26 September 2025 One of the vendor's auditors has suggested the HSN Code 84138190 with a GST rate of 5% as per the recent 56th GST Council meeting. The vendor actually purchases the steel and forges it according to our drawings before supplying it to us. According to our internal team, it should fall under the 87089900 category. Now, the question is whether the supplier has correctly classified the goods, and in this regard, do we need to obtain any clarification or declaration to avoid future audit observations, since the classification of parts is within the supplier's scope and we cannot advise them to classify it in this or that category. Please advise.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 September 2025 HSN 84138190 (GST 5%): This code covers "Other pumps, primarily for liquids, not elsewhere specified" and spare parts related to pumps. The 56th GST Council meeting did lower GST rates for certain listed goods under this category.

HSN 87089900: This category encompasses "Parts and accessories of the motor vehicles of headings 8701 to 8705—Other." If the forged steel parts are specifically designed for use solely or principally with motor vehicles, this code is generally correct.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 September 2025 If the forged parts supplied by the vendor are custom parts designed only for vehicles (not for pumps or general machinery), HSN 87089900 is typically correct.

If the supplier's product is a component for pumps or is not specifically for automobiles, then 84138190 might be proper.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 September 2025 Since the supplier controls manufacture and classification, the recipient (your company) should:

Seek a written declaration from the vendor, affirming the basis and rationale for their chosen HSN code and GST rate. This can be in the form of a classification declaration on the invoice, a technical write-up, or a self-certification letter.

Retain all technical documentation, drawings, and correspondence showing your usage and communication, which further strengthens bona fide purchase intent if challenged.

Do not directly instruct the supplier to change classification, as that legally remains their liability.

Where there is industry ambiguity or conflicting precedents, consider requesting the supplier to obtain an Advance Ruling from the GST authorities for clarity. Alternatively, your company may also apply, but as the vendor is the manufacturer, their application carries more weight.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 September 2025 Request the vendor to furnish a self-declaration specifying rationale and details of the classification.

Maintain all relevant technical and commercial documentation supporting the nature of goods and communication with the vendor.

Inform the supplier of potential risks and encourage them to consult their GST advisor or seek a formal Advance Ruling if there is any potential for ambiguity or dispute.

This approach secures your audit trail and demonstrates due diligence without taking on direct liability for misclassification.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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28 September 2025 Effective from September 22, 2025, all auto parts, regardless of HSN under Chapter 87 (including HSN 87089900), are now subject to a uniform GST rate of 18%.
As per recommendations from the 56th GST Council meeting, the GST rate for products classified under HSN 84138190 is 5%.

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