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28% GST applicable on Retrofitted Vehicle

  • Jun 1, 2020 | Divita S Gupta

The Authority of Advance Ruling in Karnataka held that a retrofitted vehicle merits classification under heading 8711 20 19 and hence attracts GST at the rate of 28%. The applicant, a two-wheeler dealership, was looking for an advance ruling on the rate of tax applicable on retrofitted two-wheelers, usually purchased by differently-abled motorists. While the two-wheelers are purchased from Hero Moto Corp at a GST rate of 28%, the retrofitting parts are purchased at a rate of 5% GST. The applicant sought an advance ruling on the issue of whether he can bill the scooter at 5% GST under HSN 8713 along with retro fitment and whether it will restrict any input tax credit on the purchase of vehicle under HSN 8711 at 28% GST. The Karnataka AAR held that a retrofitted vehicle merits classification under heading 8711 20 19 and hence attracts GST @ 28% with the applicant entitled to Input Tax Credit of tax paid on the purchase of a vehicle. 


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Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.