GST Ruling: Battery Pack Determines Classification of Three-Wheeled Vehicles

The ruling clarified that a manufacturer's "Toto" three-wheeled motor vehicles, when supplied with a battery pack, are classified under HSN 8703 as electrically operated vehicles. Without the battery pack, the vehicles are classified under Tariff-head 8706 00 31 as chassis fitted with an engine. The presence of the battery pack is crucial for the classification under the GST Act. The ruling emphasized the importance of the battery pack in determining the classification of three-wheeled motor vehicles under the specified HSN codes.

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Issues:
1. Admissibility of the Application
2. Classification of three-wheeled motor vehicles under HSN 8703

Admissibility of the Application:
The applicant, a manufacturer of "Toto" three-wheeled motor vehicles, sought clarification on the classification of these vehicles under HSN 8703 when supplied with or without a battery pack. The application was deemed admissible under section 97(2)(a) of the GST Act as the question was not pending or decided in any previous proceedings. The concerned revenue officer did not object to the admissibility, leading to the acceptance of the application.

Classification of three-wheeled motor vehicles under HSN 8703:
The applicant argued that their vehicles, when supplied with a battery pack, should be classified under HSN 8703 as electrically operated vehicles. The Bench observed that as per the Motor Vehicles Act, an e-rickshaw is a special-purpose battery-powered vehicle. The Rate Notification defines "electrically operated vehicle" as those running solely on electrical energy from external sources or batteries. The presence of a battery pack is crucial for classifying a three-wheeled electric vehicle under HSN 8703.

Further, the Bench clarified that without the battery pack, a three-wheeled vehicle loses its essential character as an electrically operated vehicle. In such cases, the vehicle would not fall under the sub-headings of vehicles fitted with internal combustion engines. Instead, it would be classified under Tariff-head 8706 00 31 as a chassis fitted with an engine, enabling locomotion once the battery pack is attached. Therefore, the ruling stated that a three-wheeled motor vehicle is classifiable under HSN 8703 as an electrically operated vehicle only when equipped with a battery pack; otherwise, it falls under HSN 8706.

In conclusion, the ruling provided clarity on the classification of three-wheeled motor vehicles under the specified HSN codes, emphasizing the significance of the battery pack in determining the classification under the GST Act. The ruling's validity was subject to the relevant provisions until declared void under the Act.

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