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2022 (1) TMI 746 - AAR - GSTLevy of GST - marine engines pertaining to HS code 8407 and its spare parts - engine forms a part of fishing vessel or not - to be classified under HS code 8407 or HS code 8902? - engine forms a part of boats of HS code 8906 being supplied to defence department and other agencies used for patrolling/flood relief and rescue purposes or not - HELD THAT:- Applicant had not filed any documentary evidences along with the application to substantiate that the engines they supply are being used in fishing vessels or for boats used by defence departments. During the Personal Hearing held on 05.10.2021, they were called upon to submit Bills of entries, invoices, purchase orders for the products imported and Tax invoices issued by the applicant. Further to that they submitted bills of entries, invoices for purchase and not for sale made by them. When contacted for clarification on these documents, they submitted that the buyers are individual fishermen and mostly they are walk in customers. Hence no purchase orders from fishermen for engines sold for fishing vessels were available with them. The applicant has not furnished any purchase orders for supply of engines at present or for proposed supplies. It is observed that the supplies made for fishing vessels have not been supported with documentary evidences - this authority is constrained to pass any ruling on the question raised about eligibility to avail rate of 5% as prescribed at Sl.no. 252 of Annexure-I of Notification No. 01/2017-C.T (Rate) dated 28.06.2017. Applicability of GST rate 5% on marine engines pertaining to HS code 8407 and its spare parts without considering its general tax rate as per the entry of Schedule I, SI.No.252 of GST Act dated 28.06.2017 - this engine forms a part of boats of HS code 8906 being supplied to defence department and other agencies used for patrolling/flood relief and rescue purposes - HELD THAT:- It is seen that the applicant has effected sale of engines to defense department and Naval base at Cochin. The vessels used by the defence and other agencies for patrol, relief and rescue operations fall under Customs Tariff Heading 8906- Other vessels including warships and lifeboats other than rowing boats. As per entry at Sl.no. 252 of Annexure-I of Notification No. 01/2017-C.T (Rate) dated 28.06.2017, parts of goods of headings 8901,8902,8904,8906,8907 falling under any chapter of the customs Tariff attracts GST @5%. Therefore if the marine engines supplied for use as part of vessel falling under tariff heading 8906, which are used by the department of defence and Naval base for patrol, relief and rescue operations, then such engines as part of such vessels will only attract GST at the rate of 5% as per the above entry. The applicant has not established sale of Outboard motors/marine engines to fishing vessels with substantiating documents. Hence no ruling could be offered in this respect. With respect to the Outboard motors/marine engines being supplied to defence department and Naval Base, applicant has submitted invoices and purchase orders to establish the supply and hence it is found that such marine engines supplied being part of Other vessels including warships and lifeboats other than rowing boats falling under Customs Tariff Heading 8906-are chargeable to 5% GST as per entry at Sl.no. 252 of Annexure-I of Notification No. 01/2017-C.T (Rate) dated 28.06.2017. However spare parts are not found to be eligible to avail for this reduced rate specified in the entry.
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