Bicycles GST Rate and HSN Code 8712 Every commodity in India has a specific HSN (Harmonized System of Nomenclature) code which describes its tax structure and classification. This universal system ensures that India has a clear demarcation for all products which in turn aids in calculating tax on the items easily. Bicycles fall within the gamut of HSN codes, specifically in 8712. It is important for the manufacturers, traders and consumers to know the implications of HSN Codes and the Goods And Services Tax (GST) associated with it.
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Understanding HSN Code 8712 The HSN Code 8712 is the “Bicycle and other cyclic pedallers (including delivery tricycles) and non-motorized bicycles.” The classification covers different types of non-motorized cycles including basic bicycles, delivery tricycles, and any other two-wheeled and three-wheeled vehicles of pedal power. The aim of this nomenclature is to make it easier to tax and ensure no taxes get missed on non-motorized cycles.
GST Rates Applicable to Bicycles under HSN Code 8712 The GST tax rates on bicycles are categorized under HSN code 8712 and have changed many times since the initiation of the GST system. These bicycles used to attract a GST rate of 12%. To encourage greener means of transport and make the purchase of bicycles easy, the GST Council reviewed the rate and changed it to 5% from 1st Aug 2019. This decrease is an affirmation of the government's initiative in supporting eco-friendly systems of transportation. Detailed GST Rate Structure for Bicycles The details provided in the chart below show in detail the GST rates on bicycles that fall under HSN code 8712:
HSN Code Description Rate (%) 8712 Bicycles And Other Cycles (Including Delivery Tricycles), Not Motorised 5/12 871200 Bicycles And Other Cycles (Including Delivery Tricycles), Not Motorised 5/12 87120010 Bicycles And Other Cycles (Including Delivery Tricycles), Not Motorised Bicycles And Other Cycles (Including Delivery Tricycles), Not Motorised Bicycles 5/12 87120090 Bicycles And Other Cycles (Including Delivery Tricycles), Not Motorised Bicycles And Other Cycles (Including Delivery Tricycles), Not Motorized Other 5/12
Note: The reduction of the GST from 12% to 5% came into effect on 1st August 2019.
Implications of GST Rate Reduction The drop in GST rate from 12% to 5% comes with some major changes:
1. Greater Access To Bicycles: A simpler GST rate skims down the cost of bicycles which makes them cheaper for many. This is good, especially in rural settings where bicycles serve as the main transport option.
2. Using Green Energy Vehicles: In a way, lowering the prices of bicycles encourages the government to help the people rely less on motor vehicles which heavily contribute to carbon emissions.
3. Health Benefits: The increased use of bicycles has encouraged people to exercise more which has improved the public’s overall health.
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GST on Bicycle Parts and Accessories Bicycles under HSN code 8712 are subject to a GST of 5%, however, parts and accessories of these bicycles are categorized separately and might be subject to different GST rates. For example, some parts and accessories may be classified under HSN code 8714, described as “Parts and accessories of motor vehicles of headings 8711 to 8713.” The GST rate associated with these goods may vary according to what they are and how they are intended to be used.
Conclusion It is important to note the tax implications based on HSN Code 8712 for key stakeholders within the bicycle sector. There is a clear tax policy and aid strategy to promote the use of eco-friendly transport at a lower cost to the general public, which is reflected in the lowering of GST. Having knowledge on these structures will aid in ensuring legal compliance while allowing for strategic decision-making for buyers and sellers alike.
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FAQs 1. What is included in HS Code 8712? HS Code 8712 includes non-motorized bikes as well as other cycles such as delivery tricycles.
2. What is the current GST on cycle purchases in India According to the latest tax update the GST on cycles under 8712 HSN code is 5%.
3. Has the cycle GST rate changed over the years? Yes, the cycle GST rate changed and now sits at 5%. It was reduced from 12% effective August 1, 2019.
4. How does GST on cycle parts differ from GST on complete bicycles? Bicycle parts that fall under the 8714 code could have different GST rates from the rest of the parts under the complete bicycles 8712 HSN code which have 5% GST.
5. Why was the GST on cycle parts reduced? For the purpose of incentivizing sustainable living, the government aimed towards making bikes more affordable by reducing the GST tax lower.
People Also Ask 1. Is there GST for all kinds of bicycles under the 8712 HSN code? Yes, all types of non-motorized bicycles including delivery tricycles are captured under this classification.
2. What is the GST on cycle accessories like bells and locks? Accessories of bikes may fall under different HSN codes and usually have above 5% GST.
3. Where can I check the last cycle HSN code GST rates? You can consult the official GST portal or tax advisory sites for the latest cycle GST rate details under 8712 HSN code.
4. Does the GST on cycle tax also apply to used bicycles? Yes. Used bicycles have an applicable GST tax if they are sold under the supervision of a registered dealer that abides to the GST rules and regulations.
5. Is it possible for companies to get an Input Tax Credit for the GST paid on bicycles? Bicycles purchased for business use and taxed under GST could benefit from ITC claims provided the company is GST registered.
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