2026-VIL-149-AAR
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SGST Advance Ruling Authority

GST - West Bengal AAR - Classification of electrically operated vehicles, Requirement of battery fitting as mandatory precondition for classification as electric vehicle - Classification and applicable GST rate on battery-operated two-wheeled and three-wheeled vehicles, whether supplied with or without battery pack - Whether battery-operated two-wheeled and three-wheeled vehicles sold with or without battery attachment are classifiable under tariff headings 8703 and 8711 and are taxable at five percent GST rate - HELD - Electrically operated vehicles are those which derive their traction energy solely from electrical energy derived from an external source or one or more electrical batteries fitted to such road vehicles and run entirely on battery-powered electric drivetrain. If an electrically operated vehicle has motor, inverter, control module and drivetrain fitted on a chassis along with the body and is capable of transporting people and goods, it retains its original character as goods referred to in customs tariff heading 8703 in case it is a three-wheeled vehicle and 8711 in case it is a two-wheeled vehicle. It is immaterial whether battery is fitted or not with the vehicle at the time of supply - The explanation to the entry for electrically operated vehicles makes it evident that a vehicle runs solely on electrical energy derived from an external source or from electrical batteries and therefore the fitting of batteries cannot be considered as a concomitant factor for defining a vehicle as an electrically operated vehicle - The HSN Explanatory Notes have not considered batteries to be a component whose absence changes the essential character of an incomplete, unfinished or unassembled vehicle. Where an electrically operated vehicle has all essential components in place including motor, drivetrain and control module, the absence of battery pack does not convert the vehicle into a mere chassis or strip it of its essential character as an electrically operated vehicle – Further, the Circular No. 179/11/2022-GST dated 03.08.2022 specifically clarifies that electrically operated vehicles are to be classified under HSN 8703 even if the battery is not fitted to such vehicle at the time of supply - All battery-operated two-wheeled and three-wheeled vehicles, whether supplied with or without battery attachment, are classifiable under tariff headings 8703 and 8711 as electrically operated vehicles and are taxable at 5% GST – Ordered accordingly
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