CKD e-rickshaw classification turns on complete kit supply and essential character, not a motor-plus-parts formula.

Rule 2(a) of the General Rules for Interpretation may treat incomplete, unassembled or disassembled goods as the complete article if they retain its essential character, so a CKD supply of an e-rickshaw can be classified as a finished electrically operated vehicle only where all components necessary to assemble a complete vehicle are supplied together as one identifiable kit and the documents consistently show CKD/SKD supply. The earlier view that a motor plus any three identified components was enough was disapproved because that test did not arise from the rule, tariff entry or GST notification. On the record, the supplier dealt in individual parts, so the goods remained classifiable as parts and components.

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Issues: Whether supply of an electric three-wheeler (e-rickshaw) in completely knocked down form is classifiable as a finished electrically operated vehicle attracting the lower GST rate, or as individual parts and components.

Analysis: Rule 2(a) of the General Rules for the Interpretation of the First Schedule to the Customs Tariff Act, 1975 applies where the goods supplied, though incomplete, unassembled or disassembled, possess the essential character of the complete article. The Authority accepted the broad principle that CKD supply of an e-rickshaw may, in an appropriate case, be treated as supply of the finished vehicle, but the specific test of supplying a motor together with any three of the other identified components was not found to flow from Rule 2(a), the tariff entry, or the GST notification. The correct inquiry is whether all components necessary to assemble a complete e-rickshaw are supplied together as one identifiable kit or package, and whether the contemporaneous documents consistently show a CKD/SKD supply rather than sale of separate parts. The record showed that the respondent was not a manufacturer supplying complete e-rickshaws in CKD form, but was dealing in individual components.

Conclusion: The earlier view that supply of a motor with any three identified components is sufficient was disapproved, and classification as an electrically operated vehicle was confined to cases where a complete CKD/SKD kit of the e-rickshaw is actually supplied; otherwise the goods remain classifiable as parts and components.

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