9911796707
TMI Blog2022 (7) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... 018. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression 'GST Act' would mean the CGST Act and the WBGST Act both. 1.2 The applicant is an entity engaged inter-alia in the business as an importer of spare parts of electrically operated vehicles. The applicant intends to enter into the business of manufacturing and reselling of electrically operated three wheeled vehicles in the state of West Bengal. 1.3 The applicant has made this application under sub section (1) of section 97 of the GST Act and the rules made there under raising following questions vide serial number 14 of the application in FORM GST ARA-01: 1) Whether a three-wheeled electrically operated vehi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alled in the vehicle Analysis: 1. When we see the definition of an 'E-Rickshaw' under Motor Vehicles Act (supra), it is clear that by definition, it is a battery powered vehicle, thus automatically satisfying all the conditions of a battery operated vehicle as mentioned above in Rule 2(u). The definition of an 'e-rickshaw' or the 'battery operated vehicle' nowhere put a condition that the battery has to be supplied by the manufacturer. What it says that it should be installed in the vehicle so that it can supply traction energy to the electric motor. 2. An electric motor converts electrical energy supplied by the traction batteries as such into the mechanical energy for the propulsion of vehicle. 3. It is worthwhile to note that the definition of battery operated vehicle (supra) use the word 'exclusively' both for the electric motor and the traction battery. By using this word, the rule makes it absolutely clear that in order to be a battery operated vehicle, it must be powered exclusively by an electric motor and traction energy to such electric motor must be supplied exclusively by the traction battery. 2.3 Is Electric Motor an engine? Answer is 'No'. An electric motor i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule to the Customs Tariff Act, 1975 (51 of 1975), including the Section and Chapter Notes and the General Explanatory Notes of the First Schedule shall, so far as may be, apply to the interpretation of this notification. General rules for the interpretation of First Schedule-Import Tariff to the Customs Tariff Act, 1975: As per Rule 3(a), the heading which provides the most specific description shall be preferred to headings providing a more general description. First Schedule to the Customs Tariff Act, 1975 (51 of 1975) Chapter 87 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) is related to 'Vehicles other than railway or tramway rolling-stock and parts and accessories thereof'. This chapter has 16 chapter headings starting from 8701 to 8716. The description of Chapter heading 8703 is "Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars". The description of sub-heading 870380 under chapter heading 8703 is "Other vehicles with only electric motor for propulsion". Under this sub-heading, "Three-wheeled vehicles" falls under tariff item 870 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hicles and shall include E- bicycles." * Analysis: "Other vehicles with only electric motor for propulsion" This entry does not talk about vehicles fitted with internal combustion engine (ICE) or hybrid vehicles where both electric motor and ICE is used. It talks about those vehicles which uses only electric motor for propulsion. Such vehicles as specified under sub-heading 870380 are as follows: Tariff Item Description 87038010 Vehicles principally designed for transport of more than seven persons, including driver 87038020 Specialized transport vehicles such as ambulances, prison vans and the like 87038030 Motor Cars 87038040 Three-Wheeled vehicles 87038090 Other As can be seen above, Tariff item for "Other vehicles with only electric motor for propulsion' which is a "Three-wheeled vehicles" is 87038040. 2.7 Interpretation of law on the issue as made by the applicant is reproduced below: o An electrically operated vehicle/electric vehicle uses only electric motor for propulsion. Such vehicles are not fitted with internal combustion engine (ICE) unlike in a diesel /petrol vehicles. o The Explanation to Entry No., 242A in Schedule-I defines "Electrically oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed or etched or punched on the vehicle and if space is insufficient in such vehicle for etching, embossing or punching, then it shall be on an identification plate welded or rivetted to the body of the vehicle. o As per Rule 3(a) of the General rules for the interpretation of First Schedule-Import Tariff to the Customs Tariff Act, 1975, the heading which provides the most specific description shall be preferred to headings providing a more general description. An electrically operated vehicle/three-wheeled electrical vehicle specified in Entry No. 206 of Schedule-II (12%) up to 31.07.2019 and Entry No. 242A of Schedule-I (5%) after that provides the most specific description which shall be preferred to headings providing a more general description in Schedule-IV (28%). o Thus, it can safely be concluded that the three-wheeled e-rickshaw intended for manufacture by the applicant is an electrically operated vehicle/three-wheeled electric vehicle falling under tariff heading 87038040 and leviable to GST @ 12% upto 31.07.2019 and 5% thereafter. o The Advance Ruling No. 06/WBAAR/2020-21 dated 10.08.2020 in the case of M/s. Hooghly Motors Pvt. Ltd is not applicable in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether a three-wheeled electrically operated vehicle (commonly known as e-rickshaw) when supplied without battery can be regarded as an electrically operated vehicle under HSN 8703. 4.3 Chapter 87 of the First Schedule to the Customs Tariff Act,1975 classifies "Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof". Further, Tariff item under 8703 broadly covers following description of goods: * MOTOR CARS AND OTHER MOTOR VEHICLES PRINCIPALLY DESIGNED FOR THE TRANSPORT OF PERSONS (OTHER THAN THOSE OF HEADING 8702), INCLUDING STATION WAGONS AND RACING CARS. Furthermore, 'Other vehicles, with only electric motor for propulsion" under Tariff item 8703 80 covers 'Three-wheeled vehicles' having HSN Code 8703 80 40. 4.4 It, therefore, appears that e-rickshaw being a three-wheeled electrically operated vehicle would be classifiable under tariff item 8703 80 40. But the issue in our hand is not to decide the HSN code of e-rickshaw rather the issue, as we find, is confined to decide whether fitting of battery is a pre-condition or not so as to qualify an e-rickshaw as an electrically operated vehicle. 4.5 Electrically operated vehicles, including two a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original character and can be termed as 'chassis'. 4.9 In this context, observation of the Orissa Authority for Advance Ruling, in the case of Anjali Enterprises may be reproduced: "In this regard, it would be relevant to refer the judgment passed by the Department of Revenue- Revisionary Authority in the case of Reva Electric Car Co. (P.) Ltd. (supra) which holds that if electrically battery operated cars exported, though not fitted with batteries at the time of export, the same is still classifiable 'battery powered road vehicles' and would run on battery when put to use. Hence, we hold that fitting of battery in the vehicle, at or before the time of supply, is not a pre-condition for the same to be classified as electrically operated vehicle". 4.10 We are also in agreement with the view taken by the Orissa AAR to conclude that when a vehicle which is solely operational on battery power is supplied without battery, the same will qualify as a supply of electrically operated vehicle and therefore shall be classifiable under tariff item 8703. In view of the above discussions, we rule as under: RULING A three-wheeled electrically operated vehicle, commonly known as e- ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
