In re Jaidka Power Systems Private Limited (GST AAR West Bengal)
Summary: The West Bengal Authority for Advance Ruling considered the application of Jaidka Power Systems Private Limited, a registered taxable person engaged in manufacture of electrically operated vehicles including E-Rickshaw commonly known as “TOTO”, E-Scooter, E-Cart and Ecovat Hydraulic. The applicant stated that it procures raw materials, accessories and batteries through imports on payment of IGST and from domestic registered suppliers on payment of applicable GST, avails input tax credit and has accumulated credit because certain inward supplies bear a higher rate than the outward supply of the finished electric vehicles. The application sought clarification on classification and GST rate where the two-wheeler and three-wheeler vehicles are supplied with or without battery attachment and also sought refund of accumulated ITC arising from inverted duty structure under section 54(3)(ii) of the GST Act. The Authority examined the scope of Section 97(2) and admitted only the first question, holding that the refund question was not covered by the statutory categories on which an advance ruling could be sought. The applicant’s submissions relied on the explanation to entry 242A of Schedule I of Notification No. 1/2017-Central Tax (Rate), the HSN Explanatory Notes, Circular No. 179/11/2022-GST dated 03.08.2022, Ministry of Road Transport and Highways Letter No. RT-11036/72/2017-MVL dated 12.08.2020, and earlier rulings concerning electric vehicles supplied without batteries. The applicant contended that fitting the battery at the time of supply is not a concomitant factor for determining whether the vehicle is electrically operated, because the vehicle is designed to run solely on electrical energy and its essential character does not change merely because the battery is supplied separately. The Revenue did not express any view on the merits. In considering the admitted question, the Authority reproduced and relied on the clarification in Circular No. 179/11/2022-GST that electrically operated vehicles, including three-wheeled electric vehicles, are to be classified under HSN 8703 even when the battery is not fitted at the time of supply. The Authority also considered the Odisha AAR ruling in Anjali Enterprises and the principle arising from Reva Electric Car Co. (P.) Ltd., under which pre-fitting of a battery is not a pre-condition for classification as an electrically operated vehicle. The Authority referred to its rulings in AMWA Moto LLP and Rohit Singh Kharwar, where e-rickshaws supplied without batteries were treated as electrically operated motor vehicles under tariff heading 8703, and applied the same reasoning to the e-scooter. On tariff classification, the Authority examined Chapter 87 of the First Schedule to the Customs Tariff Act, 1975, noting that tariff item 87038040 covers the three-wheeled vehicles concerned, while tariff item 87116020 specifically covers scooters. It considered the nature of Battery Electric Vehicles and distinguished them from hybrid, plug-in hybrid and fuel-cell vehicles, observing that the vehicles in the application derive traction energy solely from electrical energy and have no alternate source of propulsion. It concluded that where the motor, inverter, control module and drivetrain are fitted on a chassis with the body and the vehicle is capable of transporting people or goods, the vehicle retains its character under tariff heading 8703 in the case of three-wheelers and 8711 in the case of two-wheelers, and that it is immaterial whether the battery is fitted. For the GST rate, paragraph 4.11 records that the three-wheeled vehicles fall under tariff item 87038040 and the e-scooter under tariff item 87116020, and that all are covered by serial no. 441 of Schedule I of Notification No. 09/2025-Central Tax (Rate) dated 17.09.2025, relating to electrically operated vehicles including two- and three-wheeled electric vehicles. The detailed finding states that all the goods are taxable at 2.5% CGST plus 2.5% SGST. However, the formal Ruling reproduces the question as asking whether the goods are classifiable under HSN 8703 and 8711 and are taxable at 5% GST, and answers that question in the affirmative. This creates a material internal inconsistency between the detailed rate determination and the formal concluding answer. The Full Text has been retained without correction, and the Summary likewise preserves that distinction. The substantive conclusion is therefore that the specified electric vehicles remain classifiable under HSN 8703/8711 whether supplied with or without battery attachment, while the detailed rate finding states 5% in aggregate as 2.5% CGST plus 2.5% SGST, notwithstanding the affirmative formal answer to the 5% GST question.
