2018 (6) TMI 428 - AAR - GST

Classification of goods - rate of applicable GST - three wheeled powered cycle rickshaw - What is the interpretation of the term three wheeled powered cycle rickshaw as provided under SI. No. 190 o fthe Schedule 1-to Tariff Notification? - Is there any difference between an electric rickshaw operated by chargeable batteries (E-Rickshaw) and three wheeled, powered cycle rickshaw provided under Tariff Notification? - Whether inner tubes of butyl rubber used in e-rickshaw would fall within the meaning of term three wheeled powered cycle rickshaw and classification thereof? Held that - The Electric Motor Vehicle Three Wheeled (commonly known as E-Rickshaw) are completely different from three wheeled powered cycle rickshaws. Three Wheeled Electric Motor Vehicle (known as E-Rickshaw in market) is a Motor Vehicle in Motor Vehicle Act also. It has to be registered with State Transport Authorities as a Motor Vehicle. The meaning of Powered Cycle Rickshaw was clearly explained in the case of KINETIC ENGINEERING LTD. VERSUS COLLECTOR 1996 (3) TMI 555 - SUPREME COURT where Hon ble Apex Court had taken note of the findings of Tribunal that that mechanically propelled cycle means an ordinary cycle fitted with a motor or petrol engine as the mechanically propelled cycle rickshaw means a cycle rickshaw fitted with a motor or petrol engine - Similar analogy can be drawn in the present case and authority in view of the aforesaid provisions of law comes to the conclusion that Powered Cycle Rickshaw referred to in the Explanation would not cover an Auto Rickshaw and would only cover an ordinary Cycle Rickshaw to which a motor or petrol engine has been fitted. E-rickshaw and powered cycle rickshaw are not one and the same but two different items. Ruling - Tyres used in E-Rickshaw are not tyres of powered cycle rickshaw and hence they are required to be classified under Chapter Heading 4013 of GST Tariff, 2017 and attract 28% GST as on date.

Summary

Issues:
Interpretation of the term 'three wheeled powered cycle rickshaw' under Tariff Notification, distinction between an electric rickshaw and a powered cycle rickshaw, classification of inner tubes of butyl rubber used in e-rickshaw.

Analysis:
The application sought an advance ruling on the interpretation of the term 'three wheeled powered cycle rickshaw,' the difference between an electric rickshaw and a powered cycle rickshaw, and the classification of inner tubes of butyl rubber used in e-rickshaw. The ruling authority admitted the application under Section 97(2) of the CGST/SGST Act, as it pertained to the classification and applicable GST rate of the mentioned products.

A report submitted by the Joint Commissioner highlighted the distinction between 'three wheeled powered cycle rickshaw' and 'E-Rickshaw,' categorizing the inner tubes of butyl rubber used in E-Rickshaw under HSN Code 4013 with an 18% duty. During the personal hearing, the applicant's representative appeared, while no one represented the Revenue.

The ruling authority examined the relevant notifications and regulations, emphasizing that E-Rickshaws are distinct from powered cycle rickshaws. It was noted that E-Rickshaws are motor vehicles under the Motor Vehicle Act, requiring registration with State Transport Authorities. The authority referenced SSI exemption notifications and legal interpretations to clarify the definition of 'powered cycle rickshaw.'

Based on the analysis, the authority concluded that E-Rickshaws and powered cycle rickshaws are not the same but distinct items. Consequently, the tires used in E-Rickshaws are classified under Chapter Heading 4013 of the GST Tariff, attracting a 28% GST rate.

In summary, the ruling provided clarity on the classification and taxation of products related to electric rickshaws and powered cycle rickshaws, emphasizing the legal distinctions between the two categories and their respective regulatory frameworks.