Complete CKD E-Rickshaw Kits Attract 5% GST If Four Conditions Are Met: West Bengal AAR

In re Bandhan Electric Vehicles LLP (GST AAR West Bengal)

Summary: The West Bengal Authority for Advance Ruling held that Bandhan Electric Vehicles LLP’s proposed supply of complete electric three-wheeler kits in Completely Knocked Down (CKD) condition can be classified as the finished e-rickshaw under HSN 87038040 and taxed at 5%, comprising 2.5% CGST and 2.5% SGST, provided four cumulative conditions are fulfilled during actual supply. The applicant manufactures passenger and goods-carrying battery-operated three-wheelers and presently supplies fully assembled vehicles. It proposed dispatching the same vehicles as unassembled kits to authorised dealers to reduce freight costs, transit damage and storage requirements, facilitate local battery fitting and permit final road-readiness checks. Its contention was that only packing, transportation and assembly would change, while the vehicle’s identity, design, specifications and intended use would remain the same.

Each kit was represented as containing every component needed for one complete, road-worthy vehicle, including the chassis, axles, motor, controller, wiring harness, battery, charger, wheels, brakes, suspension, body, seats, lighting and fasteners. One kit would yield exactly one vehicle, with no surplus parts and no essential component to be procured elsewhere. Dealers would undertake only mounting, bolting, fastening, wiring, connecting and testing, without fabrication or manufacture. The proposed transaction would carry one composite price, one invoice and one consignment, with an e-way bill and packing list; orders, warranties and chassis identification would relate to vehicles rather than separately priced parts. The applicant sought certainty because classification as parts could carry different rates, affect pricing and expose it to differential tax, interest and penalty. The Revenue raised no objection to admission and offered no submissions on merits.

The Authority considered the treatment of e-rickshaws under the Motor Vehicles Act, 1988, their tariff classification and the distinction between complete vehicles supplied unassembled and independent parts. It adopted the guidelines in Navya Electric Vehicle Private Limited, Appeal Case No. 01/WBAAAR/APPEAL/2026-27, decided on 2 July 2026. Those guidelines require all necessary components to be supplied together as one identifiable kit; a complete CKD/SKD kit requiring only assembly without addition of an essential component; consistent purchase orders, invoices, packing lists and other contemporaneous records establishing supply of an e-rickshaw in knocked down condition; and actual consignment contents matching those records. The applicant’s proforma invoice identified vehicles by brand and chassis number, while its packing list specified 119 kinds of goods with quantities per vehicle and totals for the vehicles invoiced. The Authority found the proposed arrangements satisfied the first three conditions, while physical correspondence with documentation had to be followed or examined at the place of actual supply.

Accordingly, the Authority granted conditional classification as a finished e-rickshaw and 5% GST on the total composite value. The benefit depends on fulfilment of all four conditions in the course of supply, rather than merely describing the invoice as a vehicle. If any condition fails, the goods must be classified as individual parts and components and taxed at the respective applicable rates; the ruling does not prescribe a uniform rate for every such part.

Cases Discussed

• In re Navya Electric Vehicle Private Limited — West Bengal Appellate Authority for Advance Ruling; Appeal Case No. 01/WBAAAR/APPEAL/2026-27; order dated 02.07.2026: Relied upon by the applicant and adopted by the Authority as the governing classification guidelines. The Authority reproduced the appellate observations and ruling, then applied all four cumulative conditions to the proposed CKD supply. Failure of any condition entails classification and taxation as individual parts and components.

Alternative SEO Titles

1. 5% GST on CKD E-Rickshaws Depends on Complete Kits and Matching Records: AAR

2. Complete Unassembled E-Rickshaw Kits Qualify as Vehicles at 5% GST: West Bengal AAR

3. Missing CKD Kit Conditions Trigger Parts Classification for E-Rickshaws: AAR

4. West Bengal AAR Applies Four-Part Test for 5% GST on CKD E-Rickshaw Supplies

5. One Complete E-Rickshaw Per CKD Kit Eligible for 5% GST Subject to Conditions

FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, WEST BENGAL

1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like manner except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression ―GST Act‖ would mean the CGST Act and the WBGST Act both.

1.2 The applicant, M/s Bandhan Electric Vehicles LLP, is engaged in the manufacture and supply of battery-operated electric three-wheeled motor vehicles, commonly known as e-rickshaws. The applicant presently supplies fully assembled vehicles and proposes to supply the same vehicles in Completely Knocked Down (CKD) condition to its authorised dealers/assemblers. The CKD kit will contain all components necessary to assemble one complete e-rickshaw and will be supplied as a single identifiable kit under a single invoice, composite price and consignment. Accordingly, the applicant has sought an advance ruling on the classification of such CKD supply and the applicable GST rate. The applicant submits that the proposed CKD kit constitutes a complete e-rickshaw in unassembled form, requiring only mechanical assembly and no addition of any essential component. The applicant has therefore contended that the supply is classifiable as an electrically operated vehicle under Heading 8703, HSN 87038040, attracting GST at 5%, rather than being treated as a supply of individual parts and components taxable at 18%.

1.3 The applicant has made this application under sub-section (1) of section 97 of the GST Act and the rules made thereunder, seeking an advance ruling in respect of the following question:

Whether the supply of a complete set of components of an electric three-wheeler vehicle (e-rickshaw) in a Completely Knocked Down (CKD) form, necessary and sufficient for the assembly of the finished vehicle, should be classified as: (a) the finished vehicle itself, or (b) a set of parts, and what is the applicable rate of GST?

1.4 The aforesaid question on which the advance ruling is sought is found to be covered under clause (a) of sub-section (2) of section 97 of the GST Act.

1.5 The applicant states that the question raised in the application has neither been decided by nor is pending before any authority under any provision of the GST Act.

1.6 The officer concerned from the Revenue has raised no objection to the admission of the application.

1.7 The application is, therefore, admitted.

2. Submission of the Applicant

2.1 The Applicant, M/s Bandhan Electric Vehicles LLP, is a limited liability partnership incorporated under the Limited Liability Partnership Act, 2008, having its principal place of business at B-7, Zilla Parishad Market, Panchanantala, Berhampore, District Murshidabad, West Bengal – 742101. The Applicant is registered under the Central Goods and Services Tax Act, 2017 and the West Bengal Goods and Services Tax Act, 2017, bearing GSTIN 19ABEFB7018C1ZQ, and is regularly discharging its output tax liability and filing its periodical returns in Forms GSTR-1 and GSTR-3B. Shri Kutubuddin Mondal, Designated Partner of the Applicant, is competent to make and verify the present application, and Shri Priya Ranjan Shukla, Chartered Accountant, has been authorised to appear and represent the Applicant in the present proceedings.

2.2 The Applicant is engaged in the manufacture and supply of battery-operated electric three-wheeled motor vehicles, commonly known as ―e-rickshaws‖. The Applicant manufactures and supplies both passenger-carrying variants and goods-carrying or loader variants of such vehicles. The vehicles are propelled solely by an electric motor drawing power from an on-board battery pack. They do not contain an internal combustion engine and do not use petroleum fuel. The vehicles are low-speed electric vehicles designed principally for last-mile passenger and goods movement on public roads in semi-urban and rural areas and are also used as livelihood assets by individual owner-drivers.

2.3 Under its existing business model, the Applicant supplies the aforesaid electric three-wheelers in a fully built, fully assembled and road-worthy condition from its factory to its authorised dealers and end customers. The Applicant presently classifies such fully built electric vehicles under Heading 8703 of the First Schedule to the Customs Tariff Act, 1975, as adopted for GST purposes, and discharges GST at the rate of 5% applicable to electrically operated vehicles, including two and three-wheeled electric vehicles. The Applicant supplies such vehicles through a network of authorised dealers/assemblers situated across West Bengal and adjoining States, who are themselves registered persons under the GST law.

2.4 The Applicant now proposes to modify only the physical form in which the same electric three-wheeled vehicle is supplied to its authorised dealers/assemblers. Instead of despatching the vehicle in fully assembled condition, the Applicant proposes to supply the same vehicle in Completely Knocked Down, or ―CKD‖, condition, i.e. in an unassembled or disassembled state, for assembly by the dealer at the dealer‘s premises. The Applicant submits that this proposed change does not involve any change in the product itself, its model, specification, design or intended use, but only changes the manner in which the vehicle is packed and transported.

2.5 The Applicant submits that the proposed CKD model has been conceived purely on account of commercial, logistical and safety considerations. A fully built e-rickshaw is a bulky but comparatively low-density article, and a transport vehicle can accommodate only a limited number of fully assembled vehicles. In CKD condition, substantially more vehicles can be transported in the same vehicle, thereby reducing freight cost per vehicle. Further, fully built vehicles are susceptible to damage to body panels, paintwork, lamps and mirrors during transportation, whereas individual components packed in CKD form are less susceptible to such damage, thereby reducing transit damage and consequent warranty and rectification claims.

2.6 The Applicant further submits that assembly at the dealer‘s premises would also facilitate fitting of the battery pack of the capacity selected by the ultimate customer and enable final road-readiness checks to be carried out locally. Storage and handling of unassembled CKD kits at dealer godowns would also require substantially less space than storage of fully built vehicles. Thus, according to the Applicant, the proposed CKD arrangement is only an alternative logistical and commercial method of delivering the very same electric vehicle and does not represent a change in the nature of the product.

2.7 The Applicant specifically submits that the proposed CKD supply is not intended to be a supply of a collection of independent automobile parts. Each CKD kit contains all the components, parts and sub-assemblies necessary and sufficient to build one complete, finished and road-worthy electric three-wheeled vehicle. Nothing necessary for completion of the vehicle is left to be procured by the dealer from another source. The indicative contents of one kit are set out below:

2.8 The Applicant submits that the CKD kit is designed strictly on a one-to-one basis. One CKD kit will yield exactly one finished vehicle. The kit contains no surplus components, no spare parts and no loose components capable of independent sale. The quantity of each component corresponds exactly to the quantity required in one finished vehicle. The essential character of the goods contained in the kit, taken as a whole, is that of a finished electric three-wheeled motor vehicle. The components are model-specific and have no commercial utility in the proposed transaction except as parts of the particular vehicle for which the kit is designed. The dealer‘s activity after receipt of the kit is confined solely to mechanical assembly—mounting, bolting, fastening, wiring, connecting and final testing. No fabrication, machining, cutting, moulding, painting or manufacture of any component is undertaken, and no component is added from another source. The proposed CKD supply is, therefore, materially different from trading in loose automobile parts. The Applicant does not carry on, and does not propose to carry on, such business. The transaction is the supply of a vehicle in unassembled form and not the supply of spare parts.

2.9 According to the Applicant, the entire CKD kit will be supplied under a single tax invoice. A single composite, all-inclusive price will be charged for the kit as a whole. No component-wise or part-wise price will be charged, agreed or negotiated, and individual components will not be separately valued in the invoice or price list. The entire kit will move in a single consignment under a single e-way bill and single delivery challan/packing list. The dealer‘s order, price list and warranty will be in terms of vehicles, not individual components. Each vehicle will carry a chassis number/vehicle identification number allotted by the Applicant at dispatch, and the warranty will run in respect of that identified vehicle.

2.10 The proposed CKD supply gives rise to a genuine classification issue. Electrically operated vehicles, including two- and three-wheeled electric vehicles falling under Chapter 87, attract GST at 5%, whereas relevant motor vehicle parts under Heading 8708 and allied headings attract GST at 18%. The Applicant submits that two views are possible: the CKD kit may retain the classification of the complete finished vehicle under Heading 8703 and attract 5%; or the physical components may be treated separately under their respective headings, attracting GST @ 18% for relevant motor vehicle parts. The difference is 13 percentage points on the entire value of every vehicle. Since the e-rickshaw is a price-sensitive livelihood asset predominantly purchased by individual owner-drivers, the tax incidence directly affects the commercial viability of the proposed CKD model. If 5% is charged and 18% is subsequently held payable, the Applicant faces differential tax, interest and penalty on the entire CKD turnover and practical difficulty in recovering the amount. Conversely, charging 18% would make the product uncompetitive against fully built vehicles supplied at 5% and may result in accumulation of unutilised ITC with dealers.

2.11 In the view of the Applicant, the doubt is compounded because the physical form of supply and its commercial substance point in different directions. There is no express provision in the rate notification dealing specifically with an electrically operated vehicle in CKD condition. The Applicant therefore seeks guidance on the application of Rule 2(a) of the General Rules for Interpretation of the Import Tariff. The proposal is neither hypothetical nor academic. The Applicant has an existing manufacturing facility, dealer network and product models. The CKD model is a definite and imminent business proposal and certainty is required before implementation so that invoices, pricing, contracts and returns are made proper from the first supply. The Applicant relies upon the order dated 02.07.2026 of the West Bengal Appellate Authority for Advance Ruling in Appeal Case No. 01/WBAAAR/APPEAL/2026-27 in M/s Navya Electric Vehicle Private Limited, which considered e-rickshaws supplied in knocked down condition and laid down four cumulative conditions for treating such supply as an electrically operated vehicle in knocked down condition attracting GST at 5%.

2.12 The four conditions laid down in the aforesaid WBAAAR order are as follows:

2.13 The Applicant submits that failure to satisfy any one of these conditions would result in classification as individual parts and components. The Applicant has structured its proposed CKD supply precisely in accordance with all four conditions. According to him, each CKD kit contains all components, parts and sub-assemblies necessary and sufficient to build one complete, finished and road-worthy electric three-wheeled vehicle. Nothing required for completion is left to be procured by the dealer. One kit corresponds to exactly one finished vehicle, with no surplus components, spare parts or loose components capable of independent sale. The complete kit is supplied as a single identifiable unit under one invoice, one e-way bill and one delivery challan/packing list. The first condition is therefore satisfied because the transaction is the supply of one complete CKD kit constituting one complete e-rickshaw, rather than separate supplies of individual parts.

2.14 The CKD kit is self-sufficient and complete. Nothing is required to be added by the dealer to complete the vehicle; only mechanical assembly remains. The dealer merely mounts, bolts, fastens, wires, connects and finally tests the supplied components. No fabrication, machining, cutting, moulding, painting or manufacture is undertaken and no component is procured from another source. The essential character of the goods contained in the kit is that of a finished electric three-wheeled motor vehicle. The components are model-specific and have no commercial utility in the proposed transaction except as components of the particular vehicle. Every contemporaneous commercial document will consistently identify the transaction as supply of an e-rickshaw in CKD condition. The entire kit will be supplied under one tax invoice and described accordingly. The entire kit will be sold for one single composite, all-inclusive price. No component-wise or part-wise price will be charged, agreed or negotiated, and individual components will not be separately valued.

2.15 The documentary arrangements proposed for each CKD vehicle are as follows:

The Applicant does not carry on, and does not propose to carry on, the business of trading in loose automobile parts. The proposed CKD transaction is not a supply of spare parts for servicing or repairing vehicles; it is, in substance and commercial intent, the supply of a vehicle in unassembled form.

2.16 The third condition is fully satisfied because the purchase order, invoice, pricing arrangement, packing list, e-way bill, warranty documentation and vehicle identification consistently establish supply of an e-rickshaw in CKD condition. The actual physical contents of every consignment will correspond exactly with the relevant commercial records. Each consignment will contain one complete e-rickshaw per kit, with components merely not yet bolted or assembled. There will be no change in the identity, specification, design, model or intended use of the article supplied. The only difference from the fully built model is the manner of packing and transportation. What leaves the factory is, in substance, one e-rickshaw per kit. The fourth condition is therefore also satisfied. The physical contents of each CKD consignment will exactly correspond with the contemporaneous commercial records and there will be no additional, substituted or missing essential component.

2.17 The proposed CKD supply satisfies all four cumulative conditions laid down by the WBAAAR. It is distinguishable from a supply of individual automobile parts because the complete set of components required to assemble one vehicle is supplied together as one identifiable kit, at one composite price, under one invoice and one consignment, with only assembly remaining. The proposed CKD kit retains the essential identity and character of the finished electric three-wheeled vehicle. The unassembled state results solely from logistical and commercial considerations and should not, by itself, result in treatment as independent parts.

The Applicant further submits that the proposed CKD supply is covered by the principle embodied in Rule 2(a) of the General Rules for the Interpretation of the Import Tariff. The complete set of model-specific components, one-to-one configuration, absence of any essential component to be added and limited assembly establish the essential character of a complete electric three-wheeled vehicle.

According to the Applicant, the classification should consequently follow the complete article supplied in CKD form and not the separate tariff identity of each component merely because the components are physically disassembled. The Applicant accordingly seeks classification under Heading 8703, specifically HSN 87038040 as stated in its prayer. The existing and proposed transactions relate to the same underlying product. The proposed CKD model differs only in transportation, storage, safety and dealer-side assembly. There is no alteration in model, design, specification or intended use.

2.18 The Applicant submits that the proposed supply is not a supply of individual automobile parts but one complete electric three-wheeled vehicle in CKD condition. Each kit contains all components necessary and sufficient for one finished vehicle; only mechanical assembly remains; no essential component is added; the transaction is documented as one vehicle; and the physical contents correspond with the records.

2.19 The Applicant prays that this Hon‘ble Authority may take on record the order dated 02.07.2026 passed by the West Bengal Appellate Authority for Advance Ruling in Appeal Case No. 01/WBAAAR/APPEAL/2026-27 in M/s Navya Electric Vehicle Private Limited and note that the Applicant‘s proposed CKD model satisfies all four conditions laid down therein.

2.20 The Applicant further prays that this Hon‘ble Authority may rule that supply by M/s Bandhan Electric Vehicles LLP of a complete set of components of an electric three-wheeler vehicle (e-rickshaw) in CKD form, comprising all components necessary and sufficient for assembly of one finished vehicle, supplied as a single identifiable kit under a single invoice at a composite price, is classifiable as an electrically operated vehicle under Heading 8703, HSN 87038040, and attracts GST at 5%, comprising 2.5% CGST and 2.5% SGST. The Applicant further prays for such other or further order(s) as the Hon‘ble Authority may deem fit and proper.

3. Submission of the Revenue

3.1 The concerned officer from the revenue has not expressed any view on the merit of the issue raised by the applicant.

4. Observations & Findings of the Authority

4.1 We have gone through the records of the issue as well as submissions made by the authorized representative of the applicant during personal hearing. The Revenue has not given any submission in this regard.

4.2 According to the facts narrated by the applicant, the Applicant is engaged in the business of manufacture and supply of battery-operated electric three-wheeled motor vehicles, commonly known in trade and in common parlance as “e-rickshaws”. The Applicant manufactures and supplies both the passenger-carrying variant and the goods-carrying (loader) variant of such e-vehicles. The said vehicles are propelled solely by an electric motor drawing power from an on-board battery pack. They contain no internal combustion engine and use no petroleum fuel. In the existing business model, the Applicant supplies the vehicle in a fully built, fully assembled, and road-worthy condition from its factory to dealers and end customers. On such supplies the Applicant classifies the vehicle under Heading 8703 of the First Schedule to the Customs Tariff Act, 1975 (as adopted for GST purposes) and discharges tax at the rate of 5% applicable to “electrically operated vehicles, including two and three wheeled electric vehicles”. The Applicant proposes to change its business model so far as the despatch of the goods is concerned. Instead of despatching the vehicle in a fully assembled state, the Applicant proposes to despatch the vehicle in a Completely Knocked Down (CKD) condition — that is to say, in an unassembled or disassembled state — for assembly by the dealer at the dealer‘s premises.

4.3 In this context, the applicant has placed before us the following question:

Whether the supply of a complete set of components of an electric three-wheeler vehicle (e-rickshaw) in a Completely Knocked Down (CKD) form, necessary and sufficient for the assembly of the finished vehicle, should be classified as a) the finished vehicle itself or b) a set of parts and what is the applicable rate of GST?

4.4 Before going into the discussion, we must look at the definition of vehicles both from common parlance and with reference to the Motor Vehicles Act, 1988. The Cambridge Dictionary defines vehicle as a machine, usually with wheels and an engine, used for transporting people or goods, especially on land. The Merriam-Webster dictionary defines vehicle as a means of carrying or transporting something e.g. planes, trains, and other vehicles. On the other hand, Dictionary.com has defined it as any means in or by which someone travels or something is carried or conveyed; a means of conveyance or transport. For example, a motor vehicle; space vehicles. The Britannica Dictionary defines vehicle as a machine that is used to carry people or goods from one place to another e.g. cars, trucks, and other vehicles.

According to Section 2(28) of the Motor Vehicles Act, 1988 “motor vehicle” or “vehicle” means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding [twenty-five cubic centimetres]. E-rickshaw having three wheels will not come under this definition.

But with effect from 07.01.2015 e-cart and e-rickshaw has been brought into the ambit of the Motor Vehicles Act, 1988. Section 2A has been added to the Act, which provides as under:

2A. e-cart and e-rickshaw.—(1) Save as otherwise provided in the proviso to sub-section of section 7 and sub-section (10) of section 9, the provisions of this Act shall apply to e-cart and e-rickshaw.

(2) For the purposes of this section, “e-cart or e-rickshaw” means a special purpose battery powered vehicle of power not exceeding 4000 watts, having three wheels for carrying goods or passengers, as the case may be, for hire or reward, manufactured, constructed or adapted, equipped and maintained in accordance with such specifications, as may be prescribed in this behalf.

From the above discussion, it is clear that an electric three-wheeler vehicle, commonly known as an e-rickshaw, is included in the definition of vehicle in the Motor Vehicles Act, 1988, with effect from 07.01.2015.

Since the taxability of goods under the GST regime is determined in terms of HSN code to be found in the Customs Tariff Act, 1975, we should refer to the relevant entries under both the CGST Act, 2017 and the Customs Tariff Act, 1975. As per Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017, as amended by Central Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025, an e-rickshaw finds entry in Schedule I vide entry no. 441. The description reads: ‘Electrically operated vehicles, including two or three wheeled vehicles‘. This entry has an explanation which reads like ^„For the purposes of this entry, “Electrically operated vehicles” means vehicles which are 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.

Under the Customs Tariff Act, 1975 e-rickshaw is covered by HSN code 870380 (‘other vehicles, with only electric motor for propulsion‘) and the specific tariff item no. is 87038040, the description being ‘Three-wheeled vehicles‘. It is taxable @ 2.5% CGST+ 2.5% SGST vide serial no. 441 of Schedule I of Notification No.9/2025-Central Tax (Rate) dated 17.09.2025.

4.5 Now we will move to the first subject matter of the application. The basic issue before us is to decide whether the supply of e-rickshaw in completely knocked down (CKD) form can be regarded as supply of e-rickshaw in finished form and accordingly to decide the tax rate of e-rickshaw. The applicant states that the proposed change in the despatch pattern is dictated purely by commercial, logistical, and safety considerations, and not by any change in the product itself. The change is therefore confined to the manner of packing and transportation. There is no change in the identity, specification, design, model or intended use of the article supplied. What leaves the Applicant‘s factory is, in substance, one e-rickshaw per kit — merely in a state in which its components have not yet been bolted together.

To understand the issue placed before us we must discuss the concept of CKD vehicles first. It is more practical to understand the concept in juxtaposition to CBU (Completely Build Up) vehicles. CKD is a concept that is widely used now in automobiles, electronics and furniture industries. Conceptually, it refers to a collection of parts that must be assembled to create a finished product. In automobiles industry CKD vehicle is a vehicle with all its components in a separated condition. The components, if assembled, bring into existence a finished vehicle. Usually, this assembly work is carried out at the workshop of the car dealers. On the other hand, CBU refers to the complete vehicle with all the components fitted. It is shipped in one complete unit and does not need to be assembled. Usually, vehicles are consigned in CKD condition to save space in cargo and for convenience in transportation. Sometimes it has tax or duty implications also in a system of taxation where the finished vehicle and its components are differently taxed.

4.6 The applicant has provided a full list of components that are to be despatched. Each CKD kit proposed to be supplied by the Applicant will comprise all the components, parts and sub-assemblies which are necessary and sufficient to build one complete, finished and road-worthy electric three-wheeled vehicle. Nothing which is required to complete the vehicle is left to be procured by the dealer from any other source. An indicative list of components, according to the applicant‘s submission, is as under:

According to the applicant, the kit is designed on a one-to-one basis — one kit yields exactly one finished vehicle. The kit contains no surplus components, no spare parts and no loose components capable of independent sale. The number of each component in the kit corresponds exactly to the number required in one finished vehicle. The essential character of the goods contained in the kit, taken as a whole, is that of a finished electric three-wheeled motor vehicle. The components are model-specific and are not interchangeable across models; they have no commercial utility except as parts of the particular vehicle for which the kit is designed. According to the written submission given by the applicant, the documentation of the proposed model of business of the applicant will be as under:

(a) The entire kit will be supplied under a single tax invoice issued to the dealer.

(b) A single, composite, all-inclusive price will be charged for the kit as a whole. No component-wise or part-wise price is charged, agreed or negotiated, and the individual components are not separately valued in the invoice or in the price list.

(c) The entire kit will move in a single consignment under a single e-way bill and a single delivery challan/packing list, from the Applicant‘s factory to the dealer‘s premises.

(d) The order placed by the dealer, the price list and the warranty are all in respect of the vehicle, expressed in terms of the number of vehicles, and not in terms of individual components.

(e) The vehicle carries a chassis number/vehicle identification number allotted by the Applicant at the time of despatch of the kit, and the Applicant‘s warranty runs in respect of the vehicle so identified.

4.7 The same issue came up before the West Bengal Appellate Authority for Advance Ruling (in short WBAAAR) in case no. 01/WBAAAR/APPEAL/2026-27. In the said appellate order, the WBAAAR observed as under:

22. In our considered view, the proper application of Rule 2(a) requires examination of whether the goods supplied constitute a complete e-rickshaw in unassembled form. In other words, all components necessary for assembly of a complete e-rickshaw should be supplied together as a single identifiable unit, kit or package corresponding to the number of e-rickshaws intended to be supplied.

23. Where one or more components required for assembly of the complete e-rickshaw are absent, it cannot be said that the supplier is supplying an e-rickshaw in knocked down condition. The mere presence of certain major components cannot convert an admittedly incomplete collection of parts into a complete vehicle for classification purposes.

24. Therefore, while the principle of classification of a complete e-rickshaw supplied in unassembled form is accepted, the criterion adopted by the Authority for Advance Ruling for identifying such supplies cannot be accepted.

25. The claim that an e-rickshaw is being supplied in knocked down condition must also be supported by contemporaneous commercial records. The purchase order, invoice, packing list and other relevant documents must consistently establish that the intention of the parties is to supply an e-rickshaw in CKD/SKD condition and not independent parts and components.

26. If the supplier seeks classification as an electrically operated vehicle, the invoice and accompanying documents should clearly describe the goods as an e-rickshaw supplied in knocked down condition. Such description should also be supported by the actual contents of the package. The documentation and the physical supply must therefore be in complete consonance with each other.

27. Conversely, where the invoice as produced by the respondent describes the goods as a full e-rickshaw where the accompanying packing list shows that such e-rickshaw is comprised of seventy-two (72) individual parts and components, where all such components are necessary for assembly of a complete e-rickshaw. Absence of any one of such component tantamount that such are trading in parts rather than supply of an unassembled vehicle. Hence, in that case the goods cannot be classified as an electrically operated vehicle merely because some of the components are major or essential in nature.

On the basis of the above observations, the WBAAAR ruled as under:

I. Classification as an electrically operated vehicle in knocked down condition, and GST rate of 5% on the finished vehicle itself shall be applicable only where:

a) all components necessary for assembly of a complete e-rickshaw are supplied together as a single identifiable unit, kit or package;

b) the components supplied constitute a complete CKD/SKD kit requiring only assembly and not the addition of any essential component.

c) the purchase order, invoice, packing list and other contemporaneous commercial records consistently establish that the transaction is for supply of an e-rickshaw in CKD/SKD condition; and,

d) the actual contents of the consignment correspond with the description contained in such commercial records.

II. Failure to satisfy any of the aforesaid conditions would result in the goods being classified as individual parts and components and taxed at the rate applicable thereto.

4.8 In our considered view, the above ruling has set the guidelines for the issues involved in the present application for advance ruling. We must examine how far the applicant‘s supply corresponds to the conditions specified in the above appellate order.

4.9 The first condition laid down in the appellate order is that all components necessary for assembly of a complete e-rickshaw should be supplied together as a single identifiable unit, kit or package. As per the submission of the applicant, the proposed CKD kit will comprise all the components, parts and sub-assemblies which are necessary and sufficient to build one complete, finished and road-worthy electric three-wheeled vehicle. Nothing which is required to complete the vehicle is left to be procured by the recipient from any other source. In the course of personal hearing, the applicant‘s representative produces a proforma invoice and the related packing list proposed to accompany the consignment of goods supplied by him. The proforma invoice refers to certain number of battery operated e-rickshaw of a particular brand name with the respective chassis number. The packing list contains description of 119 kinds of goods with quantitative details of number of pieces per vehicle and total number of pieces for the number of vehicles to be found in the invoice which inter alia includes chassis/frame assembly, front and rear axles with differential, BLDC traction motor, motor controller and wiring harness, battery set with connectors, charger, wheels and tyres, suspension, brakes, body panels and roof, seats, lighting and signaling equipment, and fasteners/hardware. It is submitted that the kit is designed on a one-to-one basis — one kit yields exactly one finished vehicle. The kit contains no surplus components, no spare parts, and no loose components capable of independent sale. The number of each component in the kit corresponds exactly to the number required in one finished vehicle. The entire kit will be supplied as a single identifiable unit under a single tax invoice, a single e-way bill, and a single delivery challan/packing list, from the Applicant’s factory to the recipient’s premises.

In our understanding, the above arrangements satisfy the first condition specified in the appellate order.

4.10 The second condition specifies that the components supplied should constitute a complete CKD/SKD kit requiring only assembly and not the addition of any essential component.

As per the submission of the applicant and our understanding, the CKD kit proposed by the Applicant is self-sufficient and complete. No extra component or spare part is required to be added by the recipient to complete the vehicle. What is required at the recipient‘s end is mechanical assembly of the components. The assembly requires ordinary mechanical tools and does not involve any complex process. The components are model-specific and are not interchangeable across models. The recipient is required to do the works of mounting, bolting, fastening, wiring, connecting and final testing of the components. No other components need to be added by him. In this way the second condition is also satisfied in the proposed model of supply.

4.11 The WBAAAR has emphasised that the purchase order, invoice, packing list and other contemporaneous commercial records should consistently establish that the transaction is for supply of an e-rickshaw in CKD/SKD condition. According to the applicant, in the proposed model of supply, the applicant will satisfy the third condition by virtue of the following points:

A) The entire kit will be supplied under a single tax invoice issued to the dealer. The goods will be described in the invoice as an e-rickshaw supplied in CKD condition.

B) A single, composite, all-inclusive price will be charged for the kit as a whole. No component-wise or part-wise price is charged, agreed or negotiated, and the individual components are not separately valued in the invoice or the price list.

C) The entire kit will move in a single consignment under a single e-way bill and a single delivery challan/packing list, from the Applicant’s factory to the recipient’s premises.

D) The order placed by the dealer, the price list, and the warranty are all expressed in terms of the number of vehicles, and not in terms of individual components.

E) Each vehicle carries a chassis number / vehicle identification number allotted by the Applicant at the time of despatch of the kit, and the Applicant’s warranty runs in respect of the vehicle so identified.

We are of the considered view that the third condition is also fulfilled in the proposed model of supply.

4.12 The fourth and final condition laid down by the WBAAAR is that the actual contents of the consignment must correspond with the description contained in such commercial records. We understand that it is a condition to be followed or to be examined in situ. The applicant‘s written submission affirms that the actual physical contents of each consignment will correspond exactly with the description contained in the commercial records. What physically leaves the Applicant’s factory is one complete e-rickshaw per kit — merely in a state in which its components have not yet been bolted together.

4.13 In our considered view, if all the above four conditions are fulfilled in the course of supply of goods by the applicant, it will be considered as finished e-rickshaw in CKD form and tax will be imposed @ 2.5% CGST + 2.5% SGST on the total composite value of the goods vide serial number 441 of Schedule I of Notification No. 11/2017 – Central Tax (Rate) Dated 28.06.2017 as amended by Central Notification No. 09/2025-Central Tax (Rate) Dated 17.09.2025. It is to be noted that failure on the part of the supplier to satisfy any of the above four conditions will result in the goods being classified as individual parts and components and to be taxed at the rate applicable thereto.

In view of the foregoing discussion, we rule as under:

RULING

Question: Whether the supply of a complete set of components of an electric three- wheeler vehicle (e-rickshaw) in a Completely Knocked Down (CKD) form, necessary and sufficient for the assembly of the finished vehicle, should be classified as a) the finished vehicle itself or b) a set of parts and what is the applicable rate of GST?

Answer: The answer to part (a) is in the affirmative if the following conditions are fulfilled:

a) all components necessary for assembly of a complete e-rickshaw are supplied together as a single identifiable unit, kit or package;

b) the components supplied constitute a complete CKD/SKD kit requiring only assembly and not the addition of any essential component.

c) the purchase order, invoice, packing list and other contemporaneous commercial records consistently establish that the transaction is for supply of an e-rickshaw in CKD/SKD condition; and,

d) the actual contents of the consignment correspond with the description contained in such commercial records.

As such, GST is applicable @ 2.5% CGST + 2.5% SGST vide HSN code 87038040 and serial no. 441 of Schedule I of Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017 as amended by CGST Central Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025.

Failure on the part of the supplier to satisfy any of the above four conditions will result in the goods being classified as a set of parts. In that case, the appropriate tax rate will be applicable to individual parts.