HS Code For Car And GST Rates

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:

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.

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