TaxTMI 
TaxTMI 
2026 (2) TMI 341
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....earing on the questions raised in this Application Background 1.1 The Applicant holds an Importer-Exporter code number ("IEC") - AAICV6997J, granted under Section 7 of the Foreign Trade (Development and Regulation Act), 1992. The Applicant has its registered office at Two Horizon Centre, Level 06, Wing B, Golf Course Road, DLF -5, Sector 43, Gurgaon, Haryana, and is approaching the Customs Authority for Advance Rulings, New Delhi ("CAAR") under the provisions of Section 28H of the Customs Act, 1962 ("Act"). Overview of the Applicant Company 1.2 VinFast Auto India Private Limited, is a Vietnamese multinational automotive company, primarily engaged in the business of manufacture and sale of electric vehicles ("EVs"). The Applicant is a group company of Vingroup JSC ("Vingroup"), one of Vietnam's largest and most dynamic conglomerates. Vingroup was founded in 1993 as Technocom Corporation in Ukraine and it initially produced food products. In the early 2000s, Vingroup shifted its focus to Vietnam, establishing key brands like Vincom and Vinpearl. By 2012, Vinpearl JSC merged with Vincom JSC to form Vingroup Joint Stock Company. 1.3 VinGroup's mission is to "To Crea....
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....ation of new vehicle sales by 2030. The table below is an indication of the Applicant's expected production plan for the next years: Year (FY) Number of Electric Vehicles Planned * August 2025 onwards 3,000 2026 35,000 2027 45,000 2028 55,000 2029 70,000 * The projected production plan for the FY 2025-26 (starting August 01, 2025) has been calibrated based on the operational timelines and a phased ramp-up of manufacturing activities and the gradual increase in workforce deployment and new employment generation across functions. Further, the increase in production plan is based on the phase wise scaling of the production and deployment of work force and the projected demand in view of the policy of the Indian Government to promote electric vehicles and reduce reliance on fossil fuels. Nature of activity on which Advance Ruling is sought: 1.10 For undertaking the manufacturing and assembly of its electric vehicles at its Thoothukudi facility, the Applicant intends to import goods classifiable under various Chapters including Chapter 39, 40, 73, 84, 85, 87, etc. of Tariff Act, at different points in time, and in varying quantities....
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.... to be imported are all individual/independent products such as High Voltage Battery, Electric Motor, Lamps, Bumper, Seats, etc. It is relevant to note that the products, when imported, are standalone units/products and are not imported in any fixed or predetermined combination. iv. The products/ components would be duly packed and labeled for shipment to India. Each product is assigned a unique part number, which shall be clearly indicated on the label along with the product description, shipping date, and quantity. The labeled products will be securely packed in wooden or carton boxes or metal crates, which will thereafter be loaded into containers for export to India. It is pertinent to note that the goods imported are not tagged or earmarked for a particular unit; the goods are imported in lots and would be used as per the production requirement. v. The parts would be imported into India mostly through Chennai, Mumbai, and Thoothukudi port. In addition, if there is any urgent import required, the same may be done by way of air mode via major ports such as Chennai, Bangalore and Mumbai ports. The post of import depends on the vessel availability, logistics cost....
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.... completion of the vehicle manufacture and assembly, the electric vehicle undergoes a series of quality control check. * Thereafter, the electric vehicle would be transferred to the Finished Goods location and then sold to the dealer by issuing an invoice, who would further sell the electric vehicle to the customers. It is pertinent to note that the manufacturing of a single car, from the time of import of raw material to clearance for sale, typically takes around 6-7 days. 1.16 A detailed submission in relation to the above and its prayer before your good office is provided in the ensuring paragraphs. Product details: 1.17 As submitted above, the Applicant has set up its integrated Electric Vehicle manufacturing facility in India. For the purpose of manufacturing, the Applicant will be importing certain individual components, manufactured mainly in Vietnam and other countries. As a Vietnamese-invested company, the Applicant will utilize its own developed technology. The Applicant company plans to import components initially and gradually increase localization to reduce dependency on imported parts. 1.18 The major products intended to be imported by the Applica....
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....r production try out ("PTO") phase. The Applicant has classified the imported items under the respective Customs Tariff Headings applicable to each item under the Tariff Act and has discharged the applicable duties accordingly. Events leading to present application. 1.23 The Applicant proposes to commence the manufacturing and assembly of its electric vehicles in India from July 31, 2025, at its Thoothukudi facility. In order to facilitate such manufacturing activities and to achieve the projected production targets, the Applicant intends to import the items/products. 1.24 Accordingly, the Applicant is filing the present application seeking an Advance Ruling to obtain clarity on the appropriate classification of the proposed items to be imported. This is essential for determining the applicable rate of customs duty at the time of importation of such items, which are intended to be used in the manufacturing of electric vehicles at the Applicant's integrated facility located in the State of Tamil Nadu. 1.25 It is affirmed that at present, the questions raised in the present application are not pending in the Applicant's case before any officer of customs, the Appe....
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.... Foreign Trade (Development and Regulation Act), 1992. Hence, in our respectful submission, the Company qualifies as an "applicant" in terms of the definition contained in the Act. 1.31 That further, the scope/questions on which an "advance ruling" can be preferred is covered in sub-section 2 of Section 28H of the Act, which reads as follows: (2) The question on which the advance ruling is sought shall be in respect of,- (a) classification of goods under the Customs Tariff Act, 1975 (51 of 1975); (b) applicability of a notification issued under sub-section (1) of section 25, having a bearing on the rate of duty; (c) the principles to be adopted for the purposes of determination of value of the goods under the provisions of this Act; (d) applicability of notifications issued in respect of tax or duties under this Act or the Customs Tariff Act, 1975 (51 of 1975) or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act or the Customs Tariff Act;] [(e) determination of origin of the goods in terms of the rules notified under the Customs Tariff Act,....
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....ing goods, encompassing Sections, Chapters, Headings, Sub-headings, and Tariff Items. The official interpretation is given in the Explanatory Notes. 1.35 It is relevant to note the Customs Tariff Act contains a set of six rules, i.e., the General Rules of Interpretation, which deal with the interpretation of the tariff while classifying the goods covered therein. There are six General Rules used in interpreting the tariff. Rules one to four are related and must be applied in sequence. Rules five and six stand on their own to be applied as needed. The broad principles of the relevant rules have been reproduced below for the case of understanding: * Rule 1 prescribes how to classify products based on the wording of the headings and the relative HS Section and Chapter Notes. * Rule 2 prescribes how to classify both incomplete and unassembled goods, and mixtures and combinations of goods. * Rule 3 prescribes how to classify products that are, prima facie, classifiable under two or more different HS headings. * Rule 4 prescribes that if goods cannot be classified under Rules 1-3, the same are to be classified under the heading appropriate to the go....
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.... or more persons and is not a Special purpose motor vehicle, the same is classifiable under CTH 8703, subject to GST at 5%. 1.39 It is relevant to note that vide Circular No. 179/11/2022-GST [F.NO. CBIC-190354/172/2022- TRU], dated August 03, 2022, the classification of electric vehicles was clarified. Since GST Law refers to Customs Tariff for classification, the Circular may be referred to understand the classification of an EV. The relevant extract of the Circular is as follows: "2.6. In view of the above, it is clarified that electrically operated vehicle is to be classified under HSN 8703 even if the battery is not fitted to such vehicle at the time of supply and thereby attract GST at the rate of 5% in terms of entry 242A of Schedule I of notification No. 1/2017- Central Tax (Rate)" 1.40 Further, in In Re : Versatile Auto Components Pvt. Ltd., (2023) 10 Centax 300 (A.A.R. - GST - Telangana), it was held by the GST Advance Ruling Authority that all electrically operated vehicles including three wheeled electric vehicles are classified under HSN 8703 for the purpose of taxation under GST. 1.41 Reliance is also placed on the US Cross Tariff Ruling NY N300185 wh....
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....y to the following articles, whether or not they are identifiable as for the goods of this Section : (a) joints, washers or the like of any material (classified according to their constituent material or in heading 8484) or other articles of vulcanised rubber other than hard rubber (heading 4016); (b) of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39); (c) articles of Chapter 82 (tools); (d) articles of heading 8306; (e) machines and apparatus of headings 8401 to 8479, or parts thereof, other than the radiators for the articles of this Section, articles of heading 8481 or 8482 or, provided they constitute integral parts of engines or motors, articles of heading 8483; (f) electrical machinery or equipment (Chapter 85); (g) articles of Chapter 90; (h) articles of Chapter 91; (ij) arms (Chapter 93); (k) luminaires and lighting fittings and parts thereof of heading 9405; or (l) brushes of a kind used as parts of vehicles (heading 9603). 3. References in Chapters 86 to 88 to "parts" or " accessories" do not app....
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....ing as parts, may not qualify as parts of motor vehicles. These include products inter alia products falling under Chapter 82, 85, 90, 91, 93 etc. 1.48 Reference may also be made to the HSN Explanatory Notes to Section XVII. Note 2 and 3 are extracted for ready reference: "The expressions "parts" and "parts and accessories" do not apply to the following articles, whether or not they are identifiable as for the goods of this Section (a) Joints, washers or the like of any material (classified according to their constituent material or in heading 84.84) or other articles of vulcanised rubber other than hard rubber (heading 40. I 6); (b) Parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39); (c) Articles of Chapter 82 (tools); (d) Articles of heading 83.06; (e) Machines or apparatus of headings 84.01 to 84.79, or parts thereof, other than the radiators for the articles of this Section; articles of heading 84.8 I or 84.82 or, provided they constitute integral parts of engines or motors, articles of heading 84.83; (f) Electrical machinery or equipmen....
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....be 8708. While rejecting the Department's contention, the Tribunal held as follows: "8. On comparison of the both the heading 8483 and 8708, the impugned goods i.e. Universal Joints Parts to be used in transmission shaft, are more specifically covered under sub heading 8483 60 90 whereas nothing specific is found in respect of these goods under the heading 8708. 9. Further, in accordance with the General Rules for the interpretation, the classification shall be determined according to the terms of the heading and relative Section or Chapter Notes. Thus, it would be pertinent to examine the Section Notes. ... 9.4 In view of the above Section Note 2, the parts which are goods included in any of the heading of chapter 84 are in all cases to be classified in their respective headings, except for the heading 8409, 8431, 8448, 8466, 8437, 8487. The goods in question are included in heading 8483 of Chapter 84. However, such classification of the parts in their respective headings is subject to Note 1 of this Section XVI, which excludes the "article of Section XVII." Therefore, it is further inevitable to examine the Notes of Section XVII. ... 10.1 In view of....
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....herein. The first GRI is that the titles of sections, chapters and sub-chapters are only for ease of reference, for legal purposes classification shall be determined according to the terms of headings and in any related section or chapter notes and, provided such headings or Notes do not otherwise require, according to the following provisions: 2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this Rule), presented unassembled of disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classificat....
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....s chapter only if the same satisfies the three conditions as below. .. From the above, it is evident that insulated electrical wire and cable including wiring sets fitted with terminals or not of Headings 8544 stands excluded as per Note 2 to Section XVII. Also, condition (c) is not satisfied in as much as wiring sets of a kind used in vehicles is specifically stated under 8544 30 00. In view of the above, we find that the Electrical Wiring Harness manufactured by the applicant falls under the HSN Tariff Item 8544 30 00. It is seen that Circular No. 25/88-CX, dated 17-11-1988 issued by C.B.E. & C. has held that wiring harness are classifiable under 8544." D. Shiroki Auto Components India Pvt. Ltd. vs. Commr. of C. Ex. & S.T., Ahmedabad2020 (374) E.L.T. 433 (Tri .- Ahmd) * In this case, the Appellant imported child parts from Japan which were assembled to manufacture Round Recliner Assembly in India and then said Round Recliner Assembly were dispatched to factory at Haryana. At the factory, the recliner welding assembly was completed sent to Maruti factory where it was welded and fixed on the seat of motor vehicles. While the Department contended ....
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....e (II), parts and accessories must not be excluded by the provisions of notes of Section XVII. As discussed above, it is clear that vehicle seats is excluded by the provisions of note (II) to Section XVII, therefore, clause (II) is not fulfilled. Consequently, the vehicle seats will not cover under Heading 8708. In view of the above unambiguous provisions for classification, there is no iota of doubt that vehicle seats will not fall under [Heading] 8708 whereas, the same is correctly classifiable under [Heading] 9401. Hence, part of seats which is undisputed in the present case is correctly classifiable under CETH 9401. It is undisputed that child parts used for making parts which are subsequently used in the complete assembly of vehicle seat and the vehicle seat has been classified under [Heading] 9401, then how part of seat can be classified under [Heading] 8708. If Revenue's contention is accepted then the tariff entry i.e. seats of a kind used for motor vehicles under [Tariff Item] 9401 20 00 will become redundant." E. Tata Motors Ltd. 2022 (380) E.L.T. 492 (A.A.R. - Cus. - Mum.) * Tata Motors Ltd. filed an application seeking advance ruling on the classif....
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....les. BMW India would import only the balance components/parts/sub-assemblies of the motor vehicle from BMW Group companies. The issues raised by BMW India were: ⮚ Whether the import of components/parts/sub-assemblies by BMW would be classified as motor vehicle under Tariff Heading 87.03 or as Completely Knocked Down (CKD) kit under Sr. No. 437 of Notification No. 12/2012-Cus., dated 17-3-2012, as amended, when six essential and critical components/parts/sub-assemblies, namely; (i) engine (along with engine and transmission unit) (ii) axle assembly (iii) exhaust systems (iv) cooling module (v) heating, ventilation and air-conditioning unit and (vi) door panels were to be locally assembled/manufactured by approved local third party vendors? ⮚ If the import of components/parts/sub-assemblies by BMW would not be classified as motor vehicle or as CKD kits, whether the imports would be classified under their respective headings/sub-headings of the Customs Tariff Act, 1975 or under Tariff Heading 87.08 of the Customs Tariff Act, 1975? ⮚ The Applicant/BMW India submitted that under the pro....
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....e articles of those chapters. Note further mentions that a part or accessory which answers to a description in two or more of the headings of those chapters is to be classified under that heading which corresponds to the principal use of that part or accessory. Therefore, in order for an article to fall under headings covered by Section XVII, those parts or accessories should comply with all conditions, namely: (a) They must not be excluded by the terms of Note 2 of Section XVII. (b) They must be suitable for use solely or principally with articles of Chapters 86 to 88. (c) They must not be more specifically included elsewhere in the nomenclature .: Therefore, import of components/parts/sub-assemblies by the applicant will be classified under their respective headings/sub-headings of Customs Tariff Act, 1975. .... 33. In view of the above, we rule as under : (a) The import of components/parts/sub-assemblies by the applicant will not be classified as motor vehicle under Tariff Heading 87.03 or as Completely Knocked Down (CKD) kit under Sr. No. 437 of Notification No. 12/2012-Cus., dated 17-3-2012, as amended, when six es....
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....ified in the respective heading of the Tariff. 1.53 Further, in terms of Rule 1 of the GRI, classification shall be determined according to the terms of the headings, and any relative Section or Chapter Notes, are to be given supremacy. Rule I of the General Rules reads as follows: "1. The titles of Sections, Chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes and, provided such headings or Notes do not otherwise require, according to the following provisions" 1.54 As per Rule 1, the goods under consideration should be classified in accordance with the terms of the heading or relevant Section or Chapter Notes. The Section or Chapter Notes and Sub-Notes give a detailed explanation as to the scope and ambit of the respective Sections and Chapters. These notes have been given statutory backing and have been incorporated at the beginning of each Chapter. It is on the basis of the headings, chapter notes etc. that the classification is to be decided/determined. 1.55 That applying the Chapter Notes to Section XVII, produc....
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....r-connected with each other and not mounted on a chassis ... " 1.60 In the present case, the Applicant proposes to import individual components required for the manufacture of electric vehicles at different points in time. The goods are not mounted on a chassis and are not imported as a single integrated unit. Accordingly, the goods would be subject o tax at the rate of 15% as per the Notification No. 50/2017-Cus. PRAYER 1.61 In light of the above facts and legal position set out by the Applicant, it is most respectfully prayed that this Hon'ble Authority be pleased; i. To hold that the instant application is maintainable and pronounce its ruling on the questions set out in the application; ii. To hold that the products proposed to be imported by the Applicant and intended for use in manufacturing electric vehicles, are to be classified under the respective tariff headings as per the First Schedule of the Customs Tariff Act, 1975; iii. To hold that the products proposed to be imported by the Applicant and intended for use in the manufacturing electric vehicles, are taxable at 15% as per Entry No. 526A of Notification No. 50/2017-Customs dated....
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....ents: (A) The applicant vide present application has sought ruling on following points- (1) Whether the individual goods proposed to be imported by the Applicant, at different points in time, for use in the manufacture of electric vehicles in India, are to be classified based on their individual nature and functionality under the respective headings of the First Schedule to the Customs Tariff Act. 1975? (2) If the response to Question 1 is in the negative, whether the individual goods proposed to be imported by the Applicant, at different points in time, being disjointed and disassembled, are taxable at the rate of 15% of Basic Customs Duty as per Entry No. 526A of Notification No. 50/2017-Cus. dated 30.06.2017 (as amended) (B) It is seen that Importer has submitted a list of 2870 items. Considering the big list, comment on each and individual item is not possible. Classification can also not be decided unless function of each component is explained. Hence relevant principles of classification are given below which may be applied while deciding the classification. (B1) GENERAL RULES FOR THE INTERPRETATION OF THE HARMONIZED SYSTEM Classification of good....
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....lassified by reference to 3 (a) or 3 (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 4. Goods which cannot be classified in accordance with the above Rules shall be classified under the heading appropriate to the goods to which they are most akin. 5. In addition to the foregoing provisions, the following Rules shall apply in respect of the goods referred to therein: (a) Camera cases, musical instrument cases, gun cases, drawing instrument cases, necklace cases and similar containers, specially shaped or fitted to contain a specific article or set of articles, suitable for long-term use and presented with the articles for which they are intended, shall be classified with such articles when of a kind normally sold therewith. This Rule does not, however, apply to containers which give the whole its essential character; (b) Subject to the provisions of Rule 5 (a) above, packing materials and packing containers presented with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when ....
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.... 25.11.2025 wherein the authorized representative of the applicant i.e. Adv. Harish Bindumadhavan, Adv. Ashwini Chandrasekaran and Ms. Sheena Sareen attended the same. During the hearing, the representative was requested to clarify Question No. 1 of the application, specifically whether the applicant seeks classification of each individual product or only the principles governing the classification of the products. The representative sought time to submit the requisite clarification in this regard. 4. Additional Submissions of the Applicant: M/s VinFast Auto India Private Ltd. Vide email dated 15.01.2026 submitted additional submissions. The Additional submissions are as under :- 4.1 We, VinFast Auto India Private Ltd. ("Applicant/We/Vinfast"), having our registered office at 1st Floor, Urbanwrk, The Statement Baani, Golf Course Road, Sector-43, Gurugram, Haryana - 122002 (earlier it was Two Horizon Centre, Level 06, Wing B, Golf Course Road, DLF -5, Sector 43, Gurgaon, Haryana) and our manufacturing plant at Plot No B-1/1, SIPCOT Industrial Park, Ottapidaram, Sillanatham, Thoothukudi, Tamil Nadu- 628402, have filed the captioned application before this Hon'ble Authori....
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.... passenger cars in India' notified vide S.O. No. 1363 (E) dated 15th March, 2024, by the Ministry of Heavy Industries: 15% Provided that nothing contained in item (ii) (c) in this S. No. shall have effect after the 31st March, 2031. Explanation. - For the removal of doubts, the exemption contained in items (i)(a) and (i)(b) of this entry shall be available, even if one or more of the components, parts or sub-assemblies required for assembling a complete vehicle are not imported in the kit, provided that the kit as presented, is classifiable under the heading 8703 of the Customs Tariff Act, 1975 as per the general rules of interpretation. 4.3 Hence, given the issuance of Notification No. 45/2025- Cus. dated 24.10.2025, we request your Goodself to please consider the applicability of Notification No. 45/2025-Cus. Dated 24.10.2025 which has superseded in the present case. Thus, the question no. 2 sought in the application may be read as under: "2. If the response to Question 1 is in the negative, whether the individual goods proposed to be imported by the Applicant, at different points in time, being disjointed and disassembled, are taxable at ....
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....ent. 4.6.7 It is further noteworthy that the goods imported by the Applicant are standalone components/goods, sourced directly from suppliers for the purpose of manufacturing the electric vehicles. These goods are not subjected to any processing, modification, or assembly prior to their importation. In fact, the goods undergo substantial process of manufacture such as welding, painting, calibration, to manufacture a vehicle. 4.6.8 At the initial stage of operations, the majority of components/ inputs are imported, as localization of these items is presently not feasible. However, the Applicant intends to progressively localize certain raw materials/ components/ inputs for this model in the future, subject to feasibility and business considerations. 4.6.9 Presently, in view of above background, the manufacturing of a single car, from the time of import of raw material to clearance for sale, typically takes around 6-7 days in India, at the Thoothukudi plant. 4.7 In the facts and circumstances set out hereinabove, the Applicant has preferred the captioned application before this Hon'ble Authority. Clarity on the issue of classification 4.8 That in the PH record, ....
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....ant submits that the Hon'ble Authority may proceed to examine and decide Question No. 2 raised in the application and decide the applicability of the Notification. Submission on the applicability of Notification No. 45/2025- Cus. dated 24.10.2025 (issued in supersession of Notification No. 50/2017-Cus. dated 30.06.2017) 4.14 At the outset, the Applicant submits that the classification of the goods imported by the Applicant, which are individual goods, unassembled and disjointed, imported at different points in time and in varying quantities, is to be determined as per their individual functionality and in line with the GRI. That the goods imported are not in the form of a "kit" in any manner so as to be classified under CTH 8703 of the Tariff Act and hence, the Notification is not applicable in the instant case. 4.15 In this regard, the relevant entry of the Notification is as follows: "Electrically operated vehicles, if imported,- (i) incomplete or unfinished, as a knocked down kit containing necessary components, parts or sub-assemblies for assembling a complete vehicle, including battery pack, motor, motor controller, charger, power control unit, e....
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.... exceed the stipulated quantity they shall be characterized as Imported Assemblies." 4.20 Thus, it is submitted that, in trade and in common parlance, kits are recognized in two forms, namely SKD kits and CKD kits, both of which necessarily presuppose the import of substantially complete articles, in a disassembled form. In the present case, the goods imported by the Applicant is not a kit in any manner as they are neither imported as a set/assembly nor in quantities that could be assembled as an electric vehicle. 4.21 In the present case, the goods are imported as individual units, at different points in time, as per the requirement. The goods imported are not tagged or earmarked for a particular unit. Also, the Applicant places orders with its foreign suppliers on a part-by-part basis for the import of individual inputs required for the assembly of the product. 4.22 It is reiterated that the goods are imported by the Applicant in varying and mismatched quantities, and at no point in time does any shipment contain such goods which, if assembled together, would result in a complete or substantially complete vehicle or impart the essential character of a vehicle. That the g....
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....ehicle. In other words, as per Rule 2(a) of the GRI, unfinished, incomplete, unassembled or disassembled goods shall be classified under the same heading as the same goods in a finished state provided that they have the essential character of the complete or finished article. 4.28 In the instant case, the goods imported by the Applicant are individual/independent goods. The goods do not, neither individually nor collectively, as presented at the time of importation, possess the essential character of a complete motor vehicle. It is reiterated that the goods imported by the Applicant are standalone goods, imported at different points in time, and used in the manufacture of a vehicle. The goods are not unfinished, incomplete, unassembled or disassembled in a manner that goods imported, when put together, would result in a complete vehicle. Further, critical body parts are imported in an unwelded and unpainted condition, necessitating substantial manufacturing processes such as welding, painting and assembly, without which a motor vehicle cannot come into existence. 4.29 Further, to elaborate, the Applicant is importing various goods, which include High Voltage Battery, Electric....
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....e essential characteristics of a vehicle. 4.33 Hence, the goods imported by the Applicant are not covered within Entry No. 526A of Notification. Without prejudice, the goods shall be classified and subjected to tax as per (i)(a) of Sr. No. 318 of Notification 4.34 Without prejudice, it is submitted that assuming without admitting that the imported goods are covered under Sr. No. 318 of the Notification, the goods imported by the Applicant, being independent goods imported at different points in time, disjointed and disassembled, and not mounted on a chassis, would, at best, be covered under (i)(a) and accordingly be liable to customs duty at the concessional rate of 15%. 4.35 The Applicant submits that the imported goods satisfy each and every condition prescribed under (i)(a) of Sr. No.318, for the following reasons: a. The goods are imported as independent and disjointed items, at different points in time, for use in manufacture of a vehicle. The goods imported by the Applicant, including High Voltage Battery, Brake System, E-Motor, HV compressor, etc. are standalone units/products, are not interconnected with each other at the time of import. b. The....
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....;s manufacturing facility. The Applicant may also import these components/products as spare parts to fulfill the after-sale requirement for the customers. Further, the goods will be imported as individual products, in varying quantities, unconnected, and at different points in time. Further, the imported goods may not be used simultaneously in the manufacture of a vehicle, as the imports would be received in mismatched quantities over different points in time, as per the production requirement, shipping time and packaging design. 5.2.1 These goods proposed to be imported for use in manufacture of the electric vehicles, as per the Applicant, would be classified under the respective tariff heading, taxable at the applicable rates. Furthermore, the Applicant has expressed its intention to claim benefits under the relevant Free Trade Agreement with the exporting country basis the eligible HSNs, subject to compliance with the conditions stipulated therein. 5.2.2 The activity proposed to be undertaken by the Appellant is as follows: i. The Applicant would undertake import of components/products for manufacturing and assembly of electric vehicles from suppliers located in V....
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....the after-sales market. viii. At the manufacturing facility, the individual components/products, both imported and locally procured would be used, in combination, to manufacture the electric vehicles. Issue of classification: 5.3 The applicant has raised the following question for determination on the issue of classification :- Question 1: Whether the individual products to be imported by the Applicant at different points in time, as detailed in Annexure-I, for use in the manufacture of electric vehicles in India, are to be classified based on their individual nature and functionality under the respective tariff headings as per the First Schedule of the Customs Tariff Act, 1975? 5.3.1 The Applicant submits that for the manufacturing and assembly of its electric vehicles, the Applicant intends to import goods classifiable under various Chapters including Chapter 39, 40, 73, 84, 85, 87, etc. of Tariff Act, at different points in time, and in varying quantities, depending on the packaging design and the manufacturing schedule/forecast. Upon importation in India, the goods will be used in manufacturing and assembly of electric vehicles at the Applicant's ....
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....n is strictly in consonance with the Tariff and the GRI. This stand of the applicant is aligned to the Department's stated position. During the hearing and further submissions, the Applicant has clarified that it is not requesting for a ruling under Question No. 1 in respect of the classification of individual items (2,870 products). The Applicant further submitted that the Authority may proceed to examine and decide Question No. 2 raised in the application and decide the applicability of the Notification. 5.3.5 Though the applicant has clarified that it does not request Ruling on issue of classification but without deciding classification, applicability of Notification benefit cannot be decided. 5.3.6 1 observe that the goods imported by the Applicant are imported as standalone products, in mismatched and varying quantities, for use in the manufacture of electric vehicles in India. While some of these products are used to build/assemble sub-components of electric vehicles such as body of the electric vehicle, assembly, etc., other components are used in the manufacturing of electric vehicle. These goods are not subjected to any processing, modification, or assembly prior....
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....vehicle are not imported in the kit, provided that the kit as presented, is classifiable under the heading 8703 of the Customs Tariff Act, 1975 as per the general rules of interpretation. 15% 35% 70% 70% 15% 5.4.2 From the above, I find that; a. Scope of exemption under Entry 318 is confined to imported goods which are classified under CTH 8703. b. Part (i) of Entry 318 covers incomplete or unfinished Electrically operated vehicles imported as a knocked down kit containing necessary components, parts or sub- assemblies for assembling a complete vehicle, including battery pack, motor, motor controller, charger, power control unit, energy monitor, contactor, brake system, electric compressor. c. Under part (i) of Entry 318, whether the imported parts are individually pre-assembled or not is irrelevant. d. Clause (a) of part (i) sets out two conditions; first, none of the specified components/parts are inter-connected with each other; and second, they are not mounted on a chassis; e. Clause (b) of part (i) is different from clause (a) in so far as the first condition of clause (a) does not exist in....
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....of a complete motor vehicle. The goods imported by the Applicant are standalone goods, imported at different points in time, and used in the manufacture of a vehicle. The goods are not unfinished, incomplete, unassembled or disassembled in a manner that goods imported, when put together, would result in a complete vehicle. Further, critical body parts are imported in an unwelded and unpainted condition, necessitating substantial manufacturing processes such as welding, painting and assembly, without which a motor vehicle cannot come into existence. Thus, not classifiable under CTH 8703. 5.4.6 In view of the above, I observe that the goods imported by the Applicant are not imported as a kit, either in complete or substantially complete form, nor do they impart the essential character of a vehicle at the time of import. Accordingly, the conditions stipulated under the Entry no. 318 of Notification No. 45/2025- Cus. dated 24.10.2025 are not fulfilled and the said Notification has no application to the present case. Hence, when the goods are not imported as a kit, the goods are not covered within the Notification. 6. For the reasons recorded in the foregoing discussion and findin....