VATupdate

Clarification of customs treatment of automobile parts

The Central Board of Indirect Taxes and Customs issued guidance—Instruction 1/2022 (5 January 2022)—to clarify the treatment of “automobile parts” for customs tariff purposes.

A judgment by India’s Supreme Court in a case, Westinghouse Saxby Farmer Ltd., resulted in divergent practices regarding the customs treatment of automobile parts. Over the past eight months, many customs and goods and services tax authorities have sought to classify automobile parts under Chapter 87 citing the Westinghouse judgement, thereby causing delays in clearances and increasing costs in the supply chain.

Source KPMG

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