Question19:
We asked this question:-
Our client is a manufacturer of Tyres. Based on the advice received from GST
Mantra, we have advised our client that E-rickshaw`s Tyres falls under HSN code
4011, 4013 and GST rate is 5% considering that e-rickshaw are to be classified
as three wheeled powered rickshaw. Now our client has received a notice from the
GST Department that GST on e- rickshaw tyre is 28% under HSN code 4011, 4013
considering that it is not that tyre which is to be used in three wheeled
powered cycle rickshaw which is defined as follows under Central Excise Tariff
:-
`Powered cycle and Powered cycle rickshaw means a mechanically propelled cycle
or as the case may be mechanically propelled rickshaw, which may also be
paddled, if any necessity arises for so doing. The meaning of cycle and cycle
rickshaw will be the same as used in common parlance.` We would like to say that
our query is related to GST rate on E-rickshaw`s Tyres and not on E- rickshaw.
So please advise.
Answer:
From your previous quarries, it appeared to us that your client is a supplier
of motorized three wheeled rickshaw commonly known as e-rickshaw. Accordingly,
Law Crux Team had given its replies.
From your latest question it has become clear that your client is a supplier of
tyres of e-rickshaws and you are interested to know effective rate of tax
applicable on such tyres Our reply to this question is as under;
Tyres are mentioned against S.No. 46 of Schedule IV appended to Notification No.
1/2017- Central Tax (Rate) dated 28.06.2017 as amended attracting GST @ 28%. The
complete description of tyres given against the said entry is as under;
46. | 4011 | New pneumatic tyres, of rubber [other than of a kind used on/in bicycles, cycle-rickshaws and three wheeled powered cycle rickshaws; rear tractor tyres; and of a kind used on aircraft ] |
Further, e-Rickshaw tyres are not
covered under Schedule-I appended to the above said notification attracting 5%
GST. Under above mentioned Notification definition of powered cycle/rickshaw is
not given, hence, definition of the same given under Notification No.8/2003 CE
dated 1.3.2003 has been adopted to decide the issue at hand. Said definition is
reproduced here under;
"('powered cycle' or powered rickshaw means a mechanically propelled cycle or,
as the case may be, mechanically propelled cycle rickshaw, which may also be
peddled, if any necessity arises for so doing)". From the above definition it is
fully clear that e-rickshaw cannot be termed as mechanically propelled
cycle/rickshaw as it is operated with the help of batteries only and cannot be
mechanically peddled.
Thus, contention of department appears to be correct and the lead provided by
GST mantra is not correct.
(Reply dt.16/01/2018)