The Karnataka Authority of Advance Ruling (AAR) in the case of M/s KNK Karts Pvt. Ltd. in Advance Ruling No. KAR ADRG 20/2022 dated 12.08.2022, has ruled that the “Go-karts” are not roadworthy and cannot be registered as motor vehicles with the Regional Transport Authority (RTO). Go-Karts are not classifiable as “motor vehicles meant for carrying passengers or persons” under Chapter Tariff Heading 8703 of the First Schedule to the Customs Tariff Act, 1975.
Further, the AAR has observed that the ‘amusement park ride karts', commonly known as' Go-karts', manufactured and supplied by the applicant attract GST at the rate of 18%.
In the present case, the applicant is in the business of manufacturing and supplying “amusement park ride karts,” commonly known as “Go-Karts.” Go-Karts are primarily used for fun or amusement rides for both children and adults. The products are neither roadworthy nor meant for transportation or for carrying passengers. The applicant states that the Automotive Research Association of India (ARAI), an authority established to certify the road-worthiness of manufactured vehicles, has observed that go-karts are not permitted on public roads and are not fit for certification.
The applicant stated that the goods manufactured and supplied by them comprise amusement park go-karts and scale model karts and are supplied with an engine, transmission, and tyres. In some cases, it is provided as a “rolling chassis,” which consists of a chassis frame but no engine, transmission, or tyres.
The applicant has sought an advance ruling on the issue of the applicable GST rate on Go-Karts and whether Go-Karts are liable to be registered as motor vehicles.
The AAR noted that the Go Karts manufactured and supplied by the applicant are designed and shaped to run or drive only on extremely smooth, specially designed surfaces. It is primarily used across the globe as an amusement ride for children and families, and may be considered an amusement park ride as per the meaning assigned to “amusement park rides”. The amusement park rides are taxable at 9% CGST and 9% SGST.
