Understanding HS Code For Car
Cars are a major component of the global automotive industry and are categorized in international trade under the Harmonized System (HS) codes. Whether it’s petrol, diesel, electric, or hybrid, all types of motor cars are systematically classified for customs, taxation, and trade regulations.
Cars generally fall under Chapter 87 – Vehicles Other Than Railway Or Tramway Rolling Stock, And Parts And Accessories Thereof. The key heading is:
HS Code 8703 – Motor cars and other motor vehicles principally designed for the transport of persons.
Importance Of HS Code For Car
Accurate HS classification for cars is important for:
- Customs Declaration: Ensures legal imports and exports.
- Correct GST & Compensation Cess: Helps charge and pay applicable taxes.
- Trade Agreements: Enables usage of reduced tariffs in FTAs.
- Policy Compliance: Fulfils emission and fuel category requirements.
HS Code Classification For Car
Cars are classified under different HS subheadings based on engine type and capacity:
- 870321 – Cars with spark-ignition engine (petrol), cylinder capacity ≤1000 cc
- 870322 – Cars with petrol engine, cylinder capacity >1000 cc but ≤1500 cc
- 870323 – Cars with petrol engine, cylinder capacity >1500 cc
- 870331 – Cars with compression-ignition engine (diesel), cylinder capacity ≤1500 cc
- 870332 – Cars with diesel engine, capacity >1500 cc
- 870380 – Electric or hybrid motor cars
- 870390 – Other motor vehicles (special-use or alternative fuels)
GST Rates For Cars In India
Cars in India attract the highest GST slab of 28%, along with an additional Compensation Cess ranging from 1% to 22%, depending on engine size and fuel type.
- Petrol/Diesel Cars: 28% GST + 1% to 22% cess
- Electric Cars: 5% GST (No compensation cess)
HS Codes And GST Rates For Car
Here’s a table listing common car categories, HS codes, and applicable GST and cess rates:
GST & Compensation Cess on Automobiles (2025)
| Product | HS Code | Category Description | GST Rate | Compensation Cess |
|---|---|---|---|---|
| Petrol Car ≤1000cc | 870321 | Entry-level petrol vehicle with compact engine | 28% | 1% |
| Petrol Car 1001cc–1500cc | 870322 | Mid-segment sedan or compact SUV | 28% | 15% |
| Petrol Car >1500cc | 870323 | Luxury/premium segment petrol vehicle | 28% | 17%–22% |
| Diesel Car ≤1500cc | 870331 | Fuel-efficient compact diesel car | 28% | 3% |
| Diesel Car >1500cc | 870332 | SUVs & luxury diesel vehicles | 28% | 20%–22% |
| Electric Car | 870380 | Battery Electric Vehicle (BEV) — eco-friendly | 5% | 0% |
| Hybrid or Other Vehicles | 870390 | Hybrid (Petrol + Electric) or alternative fuels | 28% | 15%–22% |
🚗 Note: Compensation Cess is levied in addition to GST and varies by engine size and fuel type.
Final Thoughts
Cars are classified under HS Code 8703, with subcategories based on engine type, capacity, and fuel source. In India, most petrol and diesel cars attract 28% GST plus a compensation cess up to 22%, while electric vehicles (EVs) benefit from a reduced GST rate of 5% and no cess, supporting eco-friendly transportation.
FAQs
The HS code depends on engine size: 870321, 870322, or 870323.
Most cars attract 28% GST, with additional compensation cess.
Yes, electric cars are taxed at only 5% GST, with no cess.
Diesel cars are classified under 870331 (≤1500cc) and 870332 (>1500cc).
Yes, hybrid and other vehicles may attract cess up to 22% depending on engine size.
