The West Bengal Authority for Advance Ruling (WBAAR) has held that e-rickshaws, e-carts, Ecovat Hydraulic vehicles and e-scooters, when supplied either with or without battery attachment, are classifiable under the relevant tariff headings and eligible for the concessional 5% GST rate.
The two-member Bench comprising Yogesh Sugdeo Chitte, Joint Commissioner, CGST & CX, and Jaydip Kumar Chakrabarti, Additional Commissioner, SGST has observed that the battery-operated electric two-wheelers and three-wheelers do not lose their character as electrically operated vehicles merely because the battery pack is not fitted at the time of supply.
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The applicant is engaged in manufacturing various electrically operated vehicles, including e-rickshaws commonly known as “TOTO”, e-scooters, e-carts and Ecovat Hydraulic vehicles.
The company procures raw materials, accessories and batteries both through imports on payment of IGST and from domestic registered suppliers on payment of applicable GST. It avails input tax credit on such inward supplies.
The applicant approached the Authority seeking a ruling on the appropriate classification and GST rate applicable to its battery-operated two-wheelers and three-wheelers when supplied with or without battery packs. The applicant also sought a ruling concerning refund of accumulated ITC arising from an inverted duty structure under Section 54(3)(ii) of the GST Act.
Two Questions Raised Before the Authority
The applicant essentially sought determination on two issues:
- Whether its low-cost battery-operated two- and three-wheelers, namely e-rickshaw, e-cart, E-Cart Fateh, Ecovat Hydraulic and e-scooter, supplied with or without battery attachment, could be classified under HSN 8703 and 8711, as applicable, and taxed at 5% GST.
- Whether it was entitled to claim refund of accumulated ITC arising because of an inverted tax structure under Section 54(3)(ii) of the CGST Act.
However, the Authority admitted only the first question.
The Authority examined the scope of Section 97(2) of the CGST Act, which specifies the questions in respect of which an advance ruling may be sought.
While classification of goods and applicability of notifications are expressly covered, the Authority observed that the question concerning refund of accumulated ITC due to inverted duty structure was not covered by the permissible categories under Section 97(2).
Accordingly, the Authority admitted the classification/GST-rate question but did not admit the ITC refund question.
This distinction is important: the ruling determines the classification and applicable GST rate, but it does not constitute a ruling on the applicant’s entitlement to refund of accumulated ITC under Section 54(3)(ii).
The applicant relied heavily on the Government’s clarification concerning electric vehicles supplied without batteries.
It referred to CBIC Circular No. 179/11/2022-GST dated 3 August 2022, which specifically addressed the GST treatment of electrically operated vehicles whether or not fitted with a battery pack.
The applicant argued that the explanation to Entry 242A of Schedule I of Notification No. 1/2017-Central Tax (Rate) defines electrically operated vehicles in terms of vehicles running solely on electrical energy derived from an external source or one or more electrical batteries.
According to the applicant, this definition does not make physical fitting of a battery at the exact time of supply a mandatory condition.
The applicant also relied upon the Ministry of Road Transport and Highways’ letter dated 12 August 2020, which clarified that electric vehicles could be sold and registered without pre-fitted batteries on the basis of the relevant type approval certificate.
The applicant further highlighted the changing business models in the electric mobility sector.
It submitted that the cost of batteries may be delinked from the vehicle cost and that batteries may be supplied separately by an original equipment manufacturer or energy service provider under battery-as-a-service or battery-swapping arrangements.
According to the applicant, such models reduce the upfront cost of electric vehicles and support wider adoption of electric mobility.
The applicant therefore contended that the absence of a battery at the time of supply should not alter the essential character of an otherwise complete electric vehicle.
The applicant relied upon the Odisha AAR ruling in Anjali Enterprises, reported at [(2021) 130 taxmann.com 343 (AAR-Odisha)], concerning whether fitting a battery was mandatory for two- and three-wheeled battery-powered electric vehicles to obtain the 5% GST rate.
The applicant pointed out that the vehicle, even without the battery, remained complete in terms of its essential vehicle characteristics and was capable of functioning as a means of transportation once powered by a battery.
The applicant also relied on the decision concerning Reva Electric Car Co. (P.) Ltd., under which electrically battery-operated cars exported without batteries fitted at the time of export continued to be regarded as battery-powered road vehicles.
The Authority examined the relevant provisions of Chapter 87 of the First Schedule to the Customs Tariff Act, 1975.
It noted that Chapter 87 covers vehicles other than railway or tramway rolling stock and parts and accessories thereof.
Heading 8703 covers motor cars and other motor vehicles principally designed for the transport of persons, other than vehicles falling under heading 8702.
The Authority noted that subheading 870380 covers other vehicles with only an electric motor for propulsion, while tariff item 87038040 specifically covers three-wheeled vehicles.
For two-wheelers, heading 8711 covers motorcycles, including mopeds and cycles fitted with an auxiliary motor, while subheading 871160 covers vehicles fitted with an electric motor for propulsion. Tariff item 87116020 specifically covers scooters.
The Authority found that the e-rickshaw, e-cart and Ecovat Hydraulic vehicles involved in the application are three-wheeled electrically operated vehicles.
The products use electric motors for propulsion, with energy supplied from batteries that can be charged through the electricity grid.
The Authority therefore concluded that the three-wheeled vehicles fall under tariff item 87038040.
The e-scooter, being a two-wheeled electric vehicle, falls under tariff item 87116020.
The central issue before the Authority was whether the battery must actually be fitted to the vehicle at the time of supply for the vehicle to qualify as an electrically operated vehicle.
The Authority answered this question in the negative.
It observed that an electrically operated vehicle derives its traction energy solely from electrical energy, either from an external source or from one or more electrical batteries.
Where the vehicle has its motor, inverter, control module and drivetrain fitted on the chassis along with the body and is capable of transporting people or goods, it retains its essential character as a vehicle falling under the relevant tariff heading.
The Authority specifically held that it is immaterial whether the battery is fitted or not with the vehicle.
The Authority placed considerable reliance on CBIC Circular No. 179/11/2022-GST dated 3 August 2022.
The circular had clarified that electrically operated vehicles are to be classified under HSN 8703 even where the battery is not fitted to the vehicle at the time of supply.
The circular consequently provided for the 5% GST rate under Entry 242A of Schedule I of Notification No. 1/2017-Central Tax (Rate).
The West Bengal Authority found that the principle contained in the circular applied to the vehicles before it, including the e-scooter.
The Authority also considered the subsequent rate notification, Notification No. 09/2025-Central Tax (Rate) dated 17 September 2025.
Serial No. 441 of Schedule I refers to:
“Electrically operated vehicles, including two- and three-wheeled electric vehicles.”
The explanation to the entry covers vehicles that run solely on electrical energy derived from an external source or from one or more electrical batteries fitted to the road vehicles.
The Authority found that the three-wheelers covered by tariff item 87038040 and the e-scooter covered by tariff item 87116020 are electrically operated vehicles covered by the relevant entry.
The Authority specifically noted that electrically operated two-wheelers have been carved out for GST purposes and included within Serial No. 441 of Schedule I.
It therefore concluded that the alternative entries applicable to heading 8711 in Schedule II and Schedule III would not apply to the electric scooter in the present case.
Accordingly, the Authority held that all the products covered by the application are taxable at:
2.5% CGST + 2.5% SGST = 5% GST
under Serial No. 441 of Schedule I of Notification No. 09/2025-Central Tax (Rate).
The West Bengal Authority for Advance Ruling ultimately answered the applicant’s classification and rate question in the affirmative.
Thus, the covered e-rickshaws, e-carts, Ecovat Hydraulic vehicles and e-scooters supplied with or without battery attachment qualify as electrically operated vehicles and attract 5% GST.
The formal ruling records:
“The answer to both questions is in the affirmative.”
Here, the reference to “both questions” in the final ruling pertains to the two limbs of the admitted classification/rate question—namely, classification under the relevant HSN headings and taxation at 5%—and should not be read as an affirmative ruling on the separate ITC refund question, which the Authority had expressly declined to admit earlier.
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