WB AAR: GST Applicable for Electrically Operated Vehicles without Battery Packs

The Authority for Advance Rulings (AAR) has announced that GST will be applied on the three-wheeler electrically operated vehicles if it is arranged with the battery packs.

“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,” There will be no tax for the HSN (Harmonised System of Nomenclature) 8703 whereas for HSN 8706 will be charged with 28% of GST Rates Grab the information of revised GST slab rates on consumer products in India, Although GST council finalized the slab rates like 5%, 12%, 18% and 28% said by the West Bengal AAR.

The tax expert and a senior partner of a firm comment that the same electrically operated 3 wheeler should not be charged under the energy initiative of the Government of India, AAR states that an electrical 3 wheeler without the battery pack ought to be taxed with 28%.

“E-rickshaw and e-auto manufacturing companies would be saddled with ineligible input tax credits (ITC) A complete guide for understanding the basics of input tax credit and it calculation with detailed examples under GST (Goods and Services Tax) India, as the shells would be chargeable at 28 percent GST, whereas there would no tax on outward supplies if the shell is fitted with batteries,”

Sorting and Classifying the Vehicles

Hooghly Motors Private Limited is a manufacturer of “three-wheeled motor vehicles”, commonly known as ‘Toto’ is a petitioner. The manufacturer asks AAR to know whether an electrically operated 3 motor vehicle for HSN 8703 fitted with the battery pack is classifiable. It reveals that this vehicle varies from the body of a three-wheeled motor vehicle sold without the battery pack. This classification will be under the code HSN 8708 on a latter note that attracts 28% GST.

With this fact the Authority of Advance Ruling (AAR) Get to know about AAR (Authority for Advance Rulings) under GST India along with its mechanism. Also, we have described its objectives, powers, orders, etc eyes that a three-wheeled motor vehicle excluding the battery has not any effective character similar to an electrically operated vehicle. Though the vehicle has not been fixed with the internal combustion engine. The vehicle will not be classified under 8703 in the act of tax until installed with devices such as solar panels.

This involves the vehicle coming in functional motion when the chassis is fixed with the motor to convert electrical energy into mechanical energy if it is attached to the battery backup. And thus the system is called the engine of the vehicle. “It is, therefore, classifiable under Tariff head 8706 00 31, being the chassis fitted with an engine of a vehicle under sub-heading 8703,”.