The West Bengal Authority of Advance Ruling (AAR) ruled that 12% GST applicable on three-wheeled electrically operated motor vehicles.
The applicant, M/s Hooghly Motors Pvt. Ltd. submitted that the goods it manufactures are supplied with the battery pack and, therefore, should be classified under HSN 8703, being an electrically operated three-wheeled motor vehicle. It is different from the body of a three-wheeled motor vehicle supplied without the battery pack. The latter may be classified as parts of a three-wheeled motor vehicle classifiable under HSN 8708.
The applicant sought advance ruling on the issue of whether such a three-wheeled vehicle is classifiable as an “electrically operated motor vehicle‟ under HSN 8703 when supplied with a battery pack.
The ruling was further sought on the classification when supplied without the battery pack.
The officer from the revenue submits that question raised in the application is not pending or decided in any proceedings of the GST Act. As such, he does not object to the admissibility of the application.
The two-member bench of Susmita Bhattacharya and Parthsarthi Dey noted that the motor vehicles for carrying less than ten passengers are classified under Heading 8703 of the First Schedule of the Customs Tariff Act, 1975, which is adopted in the GST Act for classification.
The Authority further noted that Sub-heading 8703 10 covers the vehicles specially designed for traveling on snow, golf cars, and similar vehicles. The term ‘similar’ narrows the scope to specific use other than carrying passengers on hire on regular roads. All other subheadings except the residual subheading 8703 90, refer to vehicles fitted with an internal combustion engine. E-rickshaws or electrically operated three-wheeled vehicles are, therefore, classifiable under Tariff heading 8703 90 10 of the Tariff Act.
“A three-wheeled motor vehicle without the battery pack does not have the essential character of an ‘electrically operated vehicle.’ However, it is neither a vehicle fitted with an internal combustion engine. Unless it is equipped with any device like solar panels that may supply energy for its locomotion, it is not classifiable as a vehicle under Sub-heading 8703 of the Tariff Act. However, it includes the chassis fitted with the motor to convert electrical energy into the mechanical energy to put the vehicle into locomotion once the battery pack is attached. Such a device is called the engine of the vehicle. It is, therefore, classifiable under Tariff-head 8706 00 31, being the chassis fitted,” AAR observed.
The Authority ruled that a three-wheeled motor vehicle is classifiable under HSN 8703 as an electrically operated vehicle, provided it is fitted with the battery pack. Otherwise, it will be classifiable under HSN 8706.
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