Tata Harrier vehicle is classified under heading 8703 with compensation cess @ 22% : AAR, Maharashtra

Categories: Advance Ruling
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Facts: Tata Motors Limited (“the Applicant”) is engaged in automotive manufacturing, launched new passenger vehicle Tata Harrier and sought advance ruling on its classification.

Issues Involved

  1. What is the appropriate classification of Tata Harrier vehicle having seating capacity of 5 persons including the driver, of engine capacity of 1956 cc, diesel utility vehicle?
  2. Whether Cess rates applicable to Tata Harrier Vehicle as notified by Notification No. 2/2017-Compensation Cess (Rate) dated June 28, 2017 as amended would fall under 52A attracting 20% cess or under Sr. No. 52B, attracting 22% cess and whether ground clearance should be based on laden weight or unladen weight?

Held: The Hon’ble AAR, Maharashtra vide Order No. GST-ARA-93/2018-19/B-32 dated March 22, 2019 held that Chapter 87 of Customs Tariff Act, 1975 deals with ‘Vehicles other than railway or tramway rolling- stock, and parts and accessories thereof’. Hence, “Tata Harrier” vehicle as described by Applicant falls under Chapter Heading 87 Customs Tariff Act, 1975. Considering subject vehicle as having a compression-ignition internal combustion piston engine (diesel or semi-diesel) of a cylinder capacity exceeding 1500 cc but not exceeding 2500 cc, it was found that the Tata Harrier vehicle will be considered as ‘motor cars’ and classifiable under heading 8703.

In view of specifications given by Applicant “Tata Harrier” a utility vehicle with seating capacity of 5 persons including driver engine capacity 1956 CC Fuel Diesel, ground clearance (Unladen) 205 mm will attract 22% compensation cess under Sr. No. 52 B of Notification No. 01/2017- Compensation Cess (Rate) dated June 28, 2017.  Hence, if the vehicle satisfies only conditions mentioned in main clause but is not satisfying any one or all of conditions mentioned in Explanation1, then it would not be covered under Entry at Sr. No. 52B of said Notification.

Citation: [2019]105 taxmann.com 85 (AAR-Maharashtra)