GST Classification of Brake Hoses as Vulcanized Rubber Hoses under HSN 4009

1. Background and Dispute Overview

M/s Nichirin Imperial Autoparts India Private Limited, Faridabad, is engaged in manufacturing and importing automotive components, including brake hoses used in two-wheelers and four-wheelers. A dispute arose on the correct GST classification and tax rate for these brake hoses.

The core controversy was:

  • Whether brake hoses should be treated as:
    • Vulcanized rubber hoses under Heading 4009 (Chapter 40) – taxable at 18% GST, or
    • Parts and accessories of motor vehicles under Headings 8708 and 8714 (Chapter 87) – taxable at 28% GST for four-wheelers and 5% GST for two-wheelers (for the period prior to Notification No. 9/2025-Central Tax (Rate)).

The Haryana Authority for Advance Ruling (AAR) had earlier decided in favour of Chapter 87, but the assessee challenged this before the Haryana Appellate Authority for Advance Ruling (AAAR). The AAAR ultimately set aside the AAR’s ruling and held in favour of classification under Heading 4009.

2. Original AAR Ruling and Appeal

2.1 AAR’s View

The AAR, vide Advance Ruling No. HR/ARL/09/2021-22 dated 13.12.2021, ruled as follows:

  • Brake hoses used in four-wheelers were classified under HSN 8708 (parts and accessories of motor vehicles of headings 8701 to 8705) with 28% GST.
  • Brake hoses used in two-wheelers were classified under HSN 8714 (parts and accessories of vehicles of headings 8711) with 5% GST.

The AAR’s principal reasoning:

  • The product is specially designed and primarily used as a motor vehicle part.
  • Therefore, end use in the automobile sector was treated as decisive for classification under Chapter 87, rather than as a vulcanized rubber product under Chapter 40.

2.2 Appeal Before AAAR and Delay Condonation

The assessee filed an appeal under Section 100 of the Central Goods and Services Tax Act, 2017 and the Haryana Goods and Services Tax Act, 2017.

  • There was a delay of 7 days in filing the appeal beyond the time limit under Section 100(2).
  • The AAAR, after considering the condonation application, allowed the delay and proceeded to examine the matter on merits.

The assessee’s main prayers were:

  1. Condonation of delay.
  2. Setting aside of the AAR ruling.
  3. Grant of personal hearing.

All were effectively acceded to by the AAAR in the course of proceedings.

3. Questions Raised for Advance Ruling

The assessee had originally approached the AAR seeking clarity on:

  1. HSN classification of the product “Brake Hose”.
  2. Applicable GST rate on:
    • Four-wheeler brake hoses, and
    • Two-wheeler brake hoses.

This same dispute formed the basis of the appeal before the AAAR.

4. Assessee’s Core Contentions Before AAAR

4.1 Nature and Composition of Brake Hoses

The assessee explained the manufacturing process and composition of brake hoses in detail:

  • The product is made primarily from vulcanized rubber such as EPDM or similar synthetic rubber.
  • The construction involves:
    1. Extrusion of rubber tube.
    2. Braiding with reinforcement yarn or similar material.
    3. Vulcanization.
    4. Addition of metal end fittings for connection in the braking system.

From a material and functional standpoint:

  • Around 70–75% of the hose is vulcanized rubber.
  • Approximately 15% comprises steel fittings.
  • The product’s principal role is conveying hydraulic fluid under pressure in braking systems.
  • Even with fittings attached, it essentially remains a vulcanized rubber hose.

4.2 Basis for Classification Under Heading 4009

The assessee argued that the correct classification is under HSN 4009 (tubes, pipes and hoses, of vulcanized rubber, with or without fittings). Key arguments included:

  • Material-based classification: Under the General Rules for Interpretation (GRI), classification must primarily follow:
    • The terms of the heading, and
    • Any Section or Chapter Notes.
  • Heading 4009 specifically covers tubes, pipes and hoses of vulcanized rubber, with or without fittings.
  • GRI Rule 3(b) provides that composite goods should be classified by the component giving the essential character.