2026-VIL-29-AAAR
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SGST AAAR

GST – West Bengal AAAR - Classification of E-Rickshaw Components in Completely Knocked Down (CKD) Form, Rule 2(a) of the General Rules for Interpretation - The respondent-assessee, engaged in supply of electric three-wheeler vehicles (e-rickshaws), applied for Advance Ruling seeking clarification whether supply of complete set of components of an e-rickshaw in CKD form should be classified as a finished vehicle or as individual parts – Vide the impugned order the AAR held that supply should be classified as finished vehicle if it includes motor and any three of the other four major components (transmissions, axles, chassis, and controller) in proportionate numbers, attracting GST at 5%, while supplies not meeting this criterion would be classified as parts attracting GST at 9% - Revenue in appeal contending that the ruling incorrectly applied Rule 2(a) of the General Rules for Interpretation of the Customs Tariff – HELD - While Rule 2(a) may apply to supplies of e-rickshaws in CKD condition, the specific test of motor plus any three of four components does not emerge from the language of Rule 2(a), or the Customs Tariff or GST notifications and it improperly introduces a classification standard not contemplated by statute - The proper application of Rule 2(a) requires examination of whether goods supplied constitute a complete e-rickshaw in unassembled form. Where one or more components required for assembly are absent, the supplier cannot be said to be supplying an e-rickshaw in knocked down condition – The claim of CKD supply must be supported by contemporaneous commercial records including purchase order, invoice, packing list, and other documents that consistently establish the transaction is for supply of e-rickshaw in CKD condition rather than independent parts – The respondent's registration reveals it is not a manufacturer but procures components from different suppliers and sells them to retailers, with supplies described as individual parts and components, and recipients being retailers free to trade independently, thereby establishing that goods retain their individual identity as parts and components - The supplies cannot be regarded as supply of electrically operated vehicles merely because certain major components are supplied together. The goods retain their individual identity as parts and components and are liable to be classified accordingly. The findings of the AAR adopting the motor-plus-three-components test cannot be sustained. The AAR is modified ruling to provide that classification as electrically operated vehicle in CKD condition at 5% GST applies only where all components necessary for assembly are supplied together as a single identifiable unit – The impugned Advance Ruling stands modified accordingly
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