28% GST applicable on Retrofitted Vehicle

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.