Page 43 - GSTL_3rd September 2020_Vol 40_Part 1

2020 ] NEWS DESK J25
“A three-wheeled motor vehicle is classifiable under HSN 8703 as an
electrically operated vehicle, provided it is fitted with the battery packs. Other-
wise, it will be classifiable under HSN 8706,” the West Bengal AAR said in a re-
cent ruling. HSN (Harmonised System of Nomenclature) 8703 classifies such ve-
hicle for ‘nil’ levy, while HSN 8706 means GST at 28 per cent.
Commenting on the ruling, Rajat Mohan, Senior Partner with AMRG &
Associates, said that under the renewable energy initiative of the Government,
electrically operated three-wheeled motor vehicles are chargeable to nil rate of
duties.
The AAR ruling held that an electrically-operated three-wheeled motor
vehicle would fall under the highest tax bracket of 28 per cent if it is not fitted
with a battery pack.
Vehicle classification
“E-rickshaw and e-auto manufacturing companies would be saddled
with ineligible ITC, as the shells would be chargeable at 28 per cent GST, where-
as there would no tax on outward supplies if the shell is fitted with batteries,”
said Mohan.
The applicant in the case, Hooghly Motors Private Limited, is a manufac-
turer of “three-wheeled motor vehicles”, commonly known as ‘Toto’. It had ap-
proached the AAR to know whether a three-wheeled vehicle is classifiable as an
‘electrically-operated motor vehicle’ under HSN 8703 when supplied with a bat-
tery packs. It submitted that such a vehicle is different from the body of a three-
wheeled motor vehicle supplied without the battery packs. The latter may be
classified under another code - HSN 8708 - which attracts 28 per cent GST.
After going through facts presented, the AAR observed that a three-
wheeled motor vehicle without the battery packs does not have the essential
character of an electrically operated vehicle. However, it is also not a vehicle fit-
ted with an internal combustion engine. Unless it is equipped with any device
like solar panels that may supply energy for its locomotion, it cannot be classified
as a vehicle under sub-heading 8703 of the Tariff Act. However, it includes the
chassis fitted with the motor to convert electrical energy into mechanical energy
to put the vehicle into locomotion once the battery pack is attached. Such a de-
vice is called the engine of the vehicle. “It is therefore, classifiable under Tariff
Head 8706 00 31, being the chassis fitted with an engine of a vehicle under sub-
heading 8703,” the Bench said.
[Source : Business Line, Bangalore, dated 26-8-2020]

Delhi HC hears 37 anti-profiteering pleas; J&J, HUL among
petitioners
The Delhi High Court (HC) on Monday heard 37 Goods and Services Tax
(GST) anti-profiteering writ petitions, including ones filed by Johnson & Johnson,
Reckitt Benckiser, Hindustan Unilever, Patanjali Ayurved, Philips India, Jubilant
Food-works, and IFB via videoconferencing.
It also served notice to the Attorney General of India over the constitu-
tional validity of the profiteering provision.
The HC Bench directed the petitioners to jointly finalise questions on the
constitutional validity of Section 171 of the Central GST (CGST) Act, which States
any reduction in the rate of tax on the supply of goods or services or the benefit
GST LAW TIMES  3rd September 2020  59