The amusement park rides which were manufactured for joyriding cannot be classified as motor vehicles under the Tariff heading 8703 was held by the Karnataka Authority for Advance Rulings (AAR).
The Applicant, M/S. KnK Karts (P) Limited engaged in the manufacture and supply of ‘amusement park ride karts’ commonly known as ‘Go-Karts’ which were mainly used for joy riding or amusement rides both for children as well as adults. The said products are neither roadworthy nor meant for transportation or for carrying passengers.
It was stated by the applicant that the products manufactured and supplied by them are designed and shaped to run or drive only on extremely smooth specially designed surfaced tracks or closed circuits and not on unsurfaced tracks or trails where normal automobiles can operate, are not road worthy and cannot be registered with the Regional Transport Authority as Motor Vehicles.
Further stated that Go-karts manufactured are not meant for travelling or carrying passengers but are meant for joyriding and cannot be classified as Motor Vehicles under Chapter Tariff Heading 8703 of the Customs Tariff Act, 1975
The authority observed that the CTH 8703 covers only the motor cars and other motor vehicles principally designed for the transport of persons and racing cars. The expression ‘motor cars’ or ‘motor vehicle’ used in the tariff heading was not defined either under the Customs Tariff Act, 1975 or under the Customs Act or the rules.
As per the provisions of Section 39 of the Motor Vehicles Act, 1988 motor vehicles are not permitted to drive on roads without registration with the registering authority and the Applicant was rejected by the ARAI, an authority constituted for fitness of motor vehicles run on roads has rejected the certification as the motor vehicle on the ground that the Go-karts are not roadworthy.
Dr M.P. Ravi Prasad, Additional Commissioner of Commercial Taxes Member (State) and Sri. T. Kiran Reddy, Additional Commissioner of Customs & Indirect Taxes Member (Central) observed that the applicant’s product is classifiable under the chapter tariff heading 9508 which covers “travelling circuses and travelling menageries; amusement park rides and water park amusements; fairground amusements, including shooting galleries; travelling theatres”.
The authority ruled that “ ‘amusement park ride karts’ commonly known as ‘Go-karts’ manufactured and supplied by the Applicant attracts GST at the rate of 18% as per Sl.No.441A of Schedule Ill to Notification No. 1/2017-Central Tax (Rate) dated 28-06-2017.” The applicant was represented by Sri Raghavendra B Hanjer.
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