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2021 (8) TMI 250 - AAR - GSTRate of GST - supply of electrically operated vehicles without fitting of battery - Requirement of fitting of battery in two & three-wheeled battery powered electric vehicles while selling the same to the dealers - applicability of benefit of 5% GST rate applicable for electrically operated vehicles - HELD THAT:- The applicant stated that the difference between the goods that are supplied with batteries and the ones without batteries is that, battery is not there in the latter case. Otherwise, the goods without batteries are complete in itself to act as an agent of transportation which is propelled by a motor. Once battery is fitted, the vehicles will start functioning. Thus, such goods fits within the definition of ‘Electrically operated vehicles’ mentioned in entry 242A of Notification No. 1/2017 ibid. The definition of ‘electrically operated vehicle’. Explanation to Entry No.242 A of schedule-1 to notification no.01/2017-central tax (rate), dated 28.06.2017, as amended from time to time defines the term ‘electrically operated vehicle’ to mean “vehicles which run solely on electrical energy derived from an external source or from one or more electrical batteries fitted to such road vehicles and shall include e-bicycles”. That means it is a type of electric vehicle (EV) that exclusively uses chemical energy stored in rechargeable battery packs, with no secondary source of propulsion (e.g. hydrogen fuel cell, internal combustion engine, etc.). An Electric Vehicle with battery pack uses electric motors and motor controllers instead of internal combustion engines (ICEs) for propulsion. It derives all power from battery packs and thus has no internal combustion engine etc. - thus, fitting of battery in the vehicle, at or before the time of supply, is not a precondition for the same to be classified as electrically operated vehicle. A two or three-wheeled “battery powered electric vehicle” when supplied with or without battery pack is classifiable under HSN 8703 as an ‘electrically operated vehicle’ and is taxable @ 5% GST.
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