The Authority for Advance Ruling (AAR) Mumbai held that ‘ E-Rickshaw tyres ’ is classified under Tariff Heading 4011 and the rate of tax shall be at the rate of 14 % under Maharashtra Goods and Service Tax, Act 2017 and 14% under the Central Goods and Services Act, 2017.
The applicant, Ceat Limited, is engaged in the manufacture of Rubber Tyres, Tubes and Flaps which are taxable under GST law. The Applicant has been clearing its product ‘E-rickshaw tyres’ under Chapter Heading No.4011 of the Schedule to Customs Tariffs Act, 1985 which covers ‘New pneumatic tyres of rubber’. Under GST, the same Chapter Heading No.4011 of the Schedule to the Customs Tariffs Act, 1975 attracts CGST at both 2.5% and 14%. The applicant raises the issue regarding ambiguity in the classification of the product due to the lack of reference to the term ‘e-rickshaw tyres’ in both Customs Tariff and GST Rate Schedules. As per both the schedules tax at the rate of 2.5% or 14% is applicable.
The Authority comprising of Members B.V. Borhade & Pankaj Kumar distinguished between powered cycle rickshaw and E rickshaw. E rickshaw is not a powered cycle rickshaw because it doesn’t have pedal which is pre-requisite for Powered Cycle Rickshaw and it cannot be peddled. It is a motor vehicle under Motor Vehicle Act. The Authority noted that the product of the appellant is with electric batteries and wholly different from powered cycle rickshaws.
“The schedule entry is provided with the exclusion clause. The exclusion clause enlists very specific items only. As we have already seen that the impugned product is pneumatic tyres and also doesn’t fir into exclusion clause namely [other than of a kind used on/in bicycles, cycle rickshaws and three wheeled powered cycle rickshaws; and Rear Tractor tyres; and of a kind used on aircraft] of particular entry.” observed the members.Subscribe Taxscan Premium to view the Judgment