Home Case Index All Cases GST GST + AAAR GST - 2019 (3) TMI AAAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (3) TMI 434 - AAAR - GSTClassification of goods - marine paints supplied by the Appellant - whether the goods are to be considered to be part of ship and accordingly, be then classified under S. No. 252 of the Schedule I of the Notification No. 1/2017? - rate of tax - N/N. 1/2017-Central Tax (Rate) dated 28.06.2017 - Held that:- Notification No.1/2017 dt.28.06.2017 prescribes the applicable rate of CGST. The paints supplied by the appellant are classifiable under Chapter heading 3208 and 3209 which are covered under Schedule IV of the said Notification and liable to GST @ 28%. However, under the same rate notification, Schedule-I which covers goods taxable @ 2.5% CGST has entry No.252 which covers parts (classifiable under any chapter) of goods, falling under heading 8901,8902,8904, 8905,8906 and 8907. In common parlance, paints generally means any liquid which is commonly applied to a number of surfaces and is used to provide texture to an object as well as protect the surfaces. The paint supplied by the appellant is ‘anti fouling paint’ which is generally applied to hulls of ships. In order to address the contention of the appellant, it is to be seen as what is understood by the meaning of the term ‘parts’ - What we understand from the term ‘part’ is that it should be identified as something integral and mandatory to the completion of the whole article and without which the article will not be complete. By the application of the above, it cannot be said that marine paint is part of the ship. An essential part of ship or something without which ship could not be completed and would not exist. It presumes that the article as such must, in its condition and functioning, be so essential that the whole cannot function without it. We agree with the observation of the AAR that ‘marine paints’ are in no way an integral piece of a ship which would in any way form the whole ship. The main contention of the appellant is that as per the provisions of the Merchant Shipping Act, paints are mandatorily required on all ships and therefore they should be considered as part of ships. This may be mandatory requirement for the sail worthiness of the ship but that does not indicate that they are parts of the ship. The mandatory requirement under some other law cannot be an adequate ground for classifying a product as ‘part’. Thus, the impugned product would not be a part of ship - AAR decision upheld.
|