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2018 (9) TMI 1105 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRAClassification of goods - marine paints - Whether marine paints supplied by the applicant, would be considered to be part of ship and accordingly be then classified under SI no 252 of Schedule I of Notification No 1/2017 of Central Tax (Rates) dated June 28, 2017? Held that:- here is no dispute with regard to classification of the subject goods under CTH 3208 and 3209. The difference of opinion is only with respect to the claim of the applicant that the goods are parts of ship and therefore would be eligible for concessional rate of IGST @ 5% as given under Sr. No. 252 of Schedule -I of Notification No. 1/2017 of Integrated Tax (Rates). The benefit of concessional rate of IGST @5% is available to parts of goods of headings 8901, 8902, 8904,8905,8906 and 8907 - it is very apparent that parts of goods of Heading 8901, 8902, 8904, 8905, 8906 and 8907 are eligible for concessional rate of IGST @ 5%. Anchor, Bow, Bowsprit, Fore and Aft, Hull, Keel, Mast, Rigging, Rudder, Sails, Shrouds, Engines, gearbox, Propeller, Bridge, etc. are the very essential parts of a ship or vessel and are quite clearly parts of a vessel/ ship and a ship cannot be imagined to be in existence without these parts - in addition, there are some additional equipments that are required to be made available on a ship as a measure of statutory compliances under various marine acts such as Merchant Shipping Act or Additional Safety measures such as Walkie-talkie, Binoculars, Life Jackets, Lifeboats, etc. Though these are also to be compulsorily made available on a vessel and ship but cannot be taken to be parts of a ship as per general understanding but are rather additional equipments on a ship - also, other essential items like furniture, fans, air-conditioners, television, etc which are very essential for comfort of officers and crew of the ship but do not come under essential parts or equipments of a vessel/ship. The items that are discussed as essential parts of a ship/ vessel are such essential components of a vessel/ ship without which the ship would not be complete and would not exist. These are very integral for the functioning of the ship and can be separated from the ship for repair/replacement. There are various consumable items like paints varnish, oils, grease, etc. which are essentially applied and used in or on all or most of these essential ship parts as discussed above to make them tenable, durable and worthy of the ocean. Once applied, these consumable items are consumed and lost and cannot be reused and are also not worth recovery, reuse or recycle for use on ship. Considering the meaning of an expression (Part) as defined in the dictionary, besides common parlance test it can be safely concluded that Marine Paint is not a component part of Ship. This conclusion which we have drawn as above gets support from the facts stated by the appellant and detailed discussions above as per which marine paints are clearly consumable items and not parts. Marine Paint should not be considered as a part of Ship and are not covered under Serial No.252 of Schedule I of Notification No. 1/2017 of Central Tax(Rates) Dated June 28,2017. Ruling:- Marine Paint should not be considered as a part of Ship and are not covered under Serial No.252 of Schedule I of Notification No. 1/2017 of Central Tax(Rates) Dated June 28, 2017.
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