Page 186 - GSTL_18th June 2020_Vol 37_Part 3

400 GST LAW TIMES [ Vol. 37
rofit the said vehicle with the said parts/accessories. The word ‘Retrofit’ as a
noun is an act of adding a component or accessory to something that did not have it
when manufactured. Therefore, the applicant is adding certain components to the
two wheeler by retrofitting the same i.e. an attachment is added to the said two
wheeler (motor cycles) to enable it to be driven by the disabled person. This does
not change the basic feature of the two wheeler. In the instant case the two-
wheeler was neither specially designed or constructed nor altered to change its
basic structure, after retrofitment.
7.5 Explanatory Notes to the Harmonized Commodity Description and
Coding System specifies that the Heading 8713 excludes Normal vehicles simply
adapted for use by disabled persons or a bicycle fitted with a special attachment
and pedalled with one foot and Trolley-stretchers. In the instant case the two-
wheeler is simply retrofitted with additional components/accessories to enable it
for use by disabled persons. Therefore, the impugned retrofitted two-wheeler
gets excluded from the Heading 8713.
7.6 In view of the above, the retro fitted two-wheeler is nothing but a
two-wheeler purchased by the applicant under Heading 8711 20 19, added with
additional components/accessories and hence does not change its basic struc-
ture. Therefore, the said retro fitted two-wheeler merits classification under
Heading 8711 20 19 only.
7.7 The next issue before us to decide is whether the tax paid on two
wheelers and retrofit equipment is available to the applicant as input tax credit
or not. In the instant case the two-wheeler is purchased and is retrofitted with
accessories to supply as retrofitted vehicle under Heading 8711 20 19. We draw
attention to Section 17(5) of the CGST Act, 2017, which is relevant and reads as
under :
“(5) Notwithstanding anything contained in sub-section (1) of section 16
and sub-section (1) of section 18, input tax credit shall not be available in re-
spect of the following, namely :-
(a) motor vehicles for transportation of persons having approved
seating capacity of not more than thirteen persons (including
the driver), except when they are used for making the follow-
ing taxable supplies, namely :-
(A) further supply of such motor vehicles; or
(B) transportation of passengers; or
(C) imparting training on driving such motor vehicles;
In the instant case the applicant purchases the two wheelers for “further supply
of such motor vehicles”, though they add certain accessories to retrofit the said
vehicle. Thus, the applicant is entitled to avail input tax credit of the tax/es paid
on the said motor vehicles and the retrofit equipment as the accessories are uti-
lized for value addition of the said motor vehicle.
8. In view of the foregoing, we pass the following
RULING
9. The retrofitted vehicle merits classification under Heading 8711 20 19
and hence attracts GST @ 28% and applicant is entitled for input tax credit of tax
paid on purchase of vehicle i.e. scooter.

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GST LAW TIMES  18th June 2020  186