The Authority of Advance Ruling(AAR), Karnataka ruled that the retrofitted vehicle merits classification under heading 8711 20 19 and hence attracts GST @ 28% and the applicant is entitled to Input Tax Credit (ITC) of tax paid on the purchase of vehicle i.e. scooter.
The applicant, M/s Sai Motors is a proprietary concern registered under the provisions of the Goods and Services Act, 2017. The applicant states that he is engaged in the business of supplying two-wheelers. He purchases vehicles from M/s Hero Motocorp Ltd., under HSN 87112019 which is liable to GST at 28%. He also purchases retro fitment fitting, under HSN 87131090 at GST 5%. This retro fitment fitting is fixed to the vehicles purchased and sold to the differently-abled customers.
The applicant has sought the advance ruling on the issue of whether he can bill the scooter at 5% GST under HSN 8713 along with retro fitment and it shall not restrict any input tax credit on the purchase of vehicle under HSN 8711 at 28% GST.
The Authority consisting of members M.P. Ravi Prasad and Mashud Ur Rehman Faruqui ruled that the retrofitted vehicle merits classification under heading 8711 20 19 and hence attracts GST @ 28% and the applicant is entitled to Input Tax Credit (ITC) of tax paid on the purchase of vehicle i.e. scooter.
“In the instant case the applicant purchases the two-wheelers for further supply of such motor vehicles, though they add certain accessories to retrofit the said vehicle. Thus, the applicant is entitled to avail input tax credit of the taxes paid on the said motor vehicles and the retrofit equipment as the accessories are utilized for value addition of the said motor vehicle,” the authority observed.Subscribe Taxscan AdFree to view the Judgment