Recently, the Karnataka Authority for Advance Rulings (AAR) held that amusement park ride carts could not be classified similarly to motor vehicles. It will attract a GST of 18%, falling under the HSN code 9508.
The authority examined the case of M/s KNK Karts (P) Ltd [Advance Ruling No. KAR ADRG 20/2022. The advance ruling applicant was into manufacturing carts to be used in amusement parks. These carts are on a fixed or restricted course. It could not carry passengers for transportation purposes or be moved on roads. Hence, the Automotive Research Association of India certified it as not fit to be registered under the Regional Transport Authority(RTO) as a motor vehicle.
The excise department held that the product must be classified under the HSN code 8703 of the Customs Tariff Act, attracting 28% GST, in line with the Central Tax (Rate) notification no. 1/2017 issued on 28th June 2017, last amended on 28th December 2021.
The product sold by the applicant is primarily manufactured to operate only on smooth, surfaced tracks with special designs across the globe for amusement rides. Hence, in some cases, these carts can also be classified as amusement park rides in line with their meaning under the HSN code 9508.
HSN code 9503 covers electronic toys such as tricycles, scooters, pedal cars and their parts. On the other hand, HSN code 9508 covers travelling circuses and zoos, amusement parks and water-based rides, fairground amusements, shooting galleries and travelling theatres.
The GST Council, in its 25th meeting arranged on 18th January 2018, reduced the GST rate from 28% to 18% on services of admitting persons into amusement, water and theme parks for joy rides, go-carting, and merry-go-round.
For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@cleartax.in
Annapoorna, popularly known as Anna, is an aspiring Chartered Accountant with a flair for GST. She spends most of her day Singing hymns to the tune of jee-es-tee! Well, not most of her day, just now and then.
