TMI Blog2020 (7) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... vessel. Thus, Tug Jupiter let out by the applicant to RIL on charter basis is classifiable under Sl.No.10 of Heading 9966, vide Notification No. 1/2018-IT(Rate) dated 25.01.2018 read with Notification No. 8/2017-IT(Rate) dated 28.06.2017. - AAR No. 06/AP/GST/2020 - - - Dated:- 24-2-2020 - SRI. D. RAMESH, AND SRI. M. SREEKANTH, MEMBER Represented by: Sri Ramakrishna Vuppuluri ORDER (Under sub-section (4) of Section 98 of Central Goods and Services Tax Act, 2017 and sub- section (4) of Section 98 of Andhra Pradesh Goods and Services Tax Act, 2017) 1. The present application has been filed u/s 97 of the Central Goods Services Tax Act, 2017 and AP Goods Services Tax Act, 2017 (hereinafter referred to CGST Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt falls under State jurisdiction, i.e. Assistant Commissioner (ST), Kakinada Circle. Accordingly, the application has been forwarded to the jurisdictional officer and a copy marked to the Central Tax authorities to offer their remarks as per Sec. 98(1) of CGST /APGST Act 2017. In response, remarks are received from the jurisdictional officer concerned stating that there are no proceedings lying pending or passed relating to the applicant on the issue, for which the Advance Ruling sought by the applicant. 5. Applicant s Interpretation of Law and Facts: 5.1. The Applicant submits that the Tug Jupiter let out by it to RIL on charter is correctly classifiable under SAC 996602 as Rental Services of water vessels including passenger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, is clearly classifiable under SAC 996602. 5.4 The Applicant submits that in the alternate, since the services rendered by the Tug Jupiter are in relation to oil exploration activities, the same clearly also qualifies as a lifting and handling equipment for the offshore operations which are being conducted at the MA-D26 Oil and Gas Field, which is about 20 nautical miles south east off Kakinada on the east coast of India approximately in 1100-1400 m. depth of water. 5.4.1 The Applicant submits that the charter services of Tug Jupiter being let out in the nature of leasing or hiring of machinery, the same is clearly covered by the SAC 997319 for the reason that this SAC specifically covers machinery and equipment on leasing or hiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings: We have examined the issues raised in the application. The taxability and the applicable rate of tax for the goods and services supplied or to be supplied, as governed under the provisions of respective GST Acts are examined. In view of the submission made by the applicant we find that the basic issue before us is whether the Tug Jupiter that the Applicant has let out under a charter for 730 days (with an option to extend the contract one year more) is classifiable under SAC 996602 as Rental Services of water vessels including passenger vessels, freight vessels and the like with or without operator attracting GST @5% in terms of SI. No. io(ii) which covers Time charter of vessels for transport of goods of Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Explanatory Notes to the classification of services under the GST Act provides as under: Service Accounting Code 996602: Rental services of water vessels including passenger vessels, freight vessels etc., with or without operator:- This service code includes rental services of all types of self-propelled passenger/freight vessels including tankers, bulk dry cargo vessels, cargo and freight vessels, tugboats and fishing vessels for coastal, inland and transoceanic water transport with/without crew Service Accounting Code 997319 Sr.No. Chapter, Section, Heading or Group Service Code (Tariff) Service Description ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mally get covered by any stretch of imagination as the definition indicates that they have no nexus. It is true that a tug by itself to make itself propelled could have machinery installed. Whereas, Machinery means a group of machines combined together to make a task easy. While denying Exemption of payment of duty to Tugs and barges, Hon ble Tribunal in the case of SHIPPING CORPORATION OF INDIA LTD. Vs COMMR. OF CUS. (IMPORT), MUMBAI reported in 2014 (312) E.L.T. 305 (Tri. - Mumbai) = 2013 (7) TMI 881 - CESTAT MUMBAI , categorically, held that they are not machinery, equipment or tools. In an appeal to High Court in the case, the court ratified the same and hence a tug is not a machinery, equipment or tools independently but consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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