Classification of E-rickshaw Tyres under Tariff Heading 4011 and CGST Rate of 14%

The Authority for Advance Ruling (AAR) determined that "E-rickshaw tyres" are classified under Tariff Heading 4011 and attract a CGST rate of 14%. The AAR concluded that 'e-rickshaw tyres' do not fall under the category of 'three-wheeled powered cycle rickshaws' and should not be classified under the same heading.

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Issues Involved:
1. Classification of "E-rickshaw tyres" under the GST regime.
2. Determination of the applicable rate of Central Goods and Services Tax (CGST) on "E-rickshaw tyres."

Detailed Analysis:

1. Classification of "E-rickshaw tyres" under the GST regime:
The applicant, M/S Ceat Ltd., sought an advance ruling on the classification and rate of CGST applicable to "E-rickshaw tyres." The applicant has been clearing the product under Chapter Heading No. 4011, which covers 'New pneumatic tyres, of rubber.' The ambiguity arises because the term 'e-rickshaw tyres' is not explicitly mentioned in the Customs Tariff or GST Rate Schedules.

The applicant argued that 'e-rickshaw tyres' should be treated similarly to 'three-wheeled powered cycle rickshaws' under the principle of ejusdem generis, which suggests that goods of the same kind should be treated similarly. However, the jurisdictional officer contended that 'three-wheeled powered cycle rickshaws' are different from 'e-rickshaws,' as the latter are motor vehicles under the Motor Vehicle Act and must be registered with State Transport Authorities.

The Authority for Advance Ruling (AAR) noted that 'e-rickshaws' are distinct from 'three-wheeled powered cycle rickshaws' as they do not have pedals and are solely powered by an electric motor. The ruling cited the Supreme Court case of Delhi Kinetic Engineering Ltd. vs Collector of Central Excise, which clarified that a 'powered cycle rickshaw' refers to an ordinary cycle rickshaw with a motor or petrol engine fitted, not an auto-rickshaw or e-rickshaw.

The AAR concluded that 'e-rickshaw tyres' do not fall under the category of 'three-wheeled powered cycle rickshaws' and should not be classified under the same heading.

2. Determination of the applicable rate of CGST on "E-rickshaw tyres":
The applicant highlighted the ambiguity in the GST Rate Schedules, where Chapter Heading No. 4011 is covered by two separate entries:
- Sl. No. 190 of Schedule-I, attracting CGST @ 2.5% for 'Pneumatic tyres or inner tubes, of rubber, of a kind used on/in bicycles, cycle-rickshaws, and three-wheeled powered cycle rickshaws.'
- Sl. No. 46 of Schedule-IV, attracting CGST @ 14% for 'New pneumatic tyres, of rubber [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].'

The AAR determined that 'e-rickshaw tyres' do not fit into the exclusion clause of Sl. No. 46 of Schedule-IV. Therefore, they fall under the broader category of 'New pneumatic tyres, of rubber,' which attracts a CGST rate of 14%.

Conclusion:
The AAR ruled that "E-rickshaw tyres" are classified under Tariff Heading 4011 and attract a CGST rate of 14% under both the Maharashtra Goods and Services Tax Act, 2017, and the Central Goods and Services Tax Act, 2017. The principle of ejusdem generis does not apply in this case, as 'e-rickshaws' and 'three-wheeled powered cycle rickshaws' are distinct categories of vehicles.

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