In re Skoda Auto Volkswagen India Private Limited (CAAR Mumbai)
The applicant, Skoda Auto Volkswagen India Private Limited, sought an advance ruling under Section 28-I of the Customs Act, 1962 before the Customs Authority for Advance Rulings (CAAR), Mumbai, regarding the classification of parts, components, sub-parts, and sub-assemblies of electrically operated vehicles (BEVs). The company proposed to assemble and manufacture three major systems—brake system, front and rear axles, and suspension system—at its Indian plant, using a combination of imported and locally sourced parts. Detailed lists were provided for each assembly, including brake disks, calipers, subframes, shock absorbers, sensors, springs, stabilizers, and multiple other components. The applicant would also source a range of other parts domestically (such as brake pipes, suspension springs, Bowden cables) and import additional components (such as brake boosters, steering columns, center consoles, AC compressors) from third-party suppliers and from multiple Parts Expedition Centers (PECs) in Europe, Mexico, and other locations.
The imported items would not arrive as a single consignment; they would be brought in multiple shipments, each requiring separate Bills of Entry. Parts would be procured on a Minimum Order Quantity basis and used interchangeably for various vehicle models without exclusive assignment to specific BEVs. The applicant emphasized that essential parts would not be imported together and that, “as presented,” the goods would lack the essential character of a complete BEV, preventing classification under CTH 8703 through Rule 2(a) of the General Rules of Interpretation (GRI). They relied on the BMW India advance ruling (2016) and the 2024 Madras High Court judgment affirming that import of standalone parts and assemblies should be classified under their respective tariff headings rather than as complete vehicles or CKD kits.
