TMI Blog2021 (12) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... - In the instant case, the applicant admitted to be supplying marine engines (HSN 8407 21 00) and spares for fishing vessels (HSN 8902) as parts of the same. The marine engines and spare parts used for fishing vessels (being part of the fishing vessel) attract 5% GST. If marine engine is supplied for use other than as parts of fishing vessels as stated above, the rate of GST is applicable under the respective Customs Tariff Headings in which they are classified. Whether GST leviable on supply of materials and labour charges incurred during the warranty period, free of cost? - HELD THAT:- During the warranty period the goods and service have been supplied to customers as free of charge. No separate consideration is charged and received at the time of replacement. This is because consideration for the same has been recovered at the time of supply of principal goods. However, the tax on the same would have been paid at the time of principal supply of goods; as such costs are included in the price of principal goods supplied. Therefore the replacement of the goods and service during the warranty period without consideration does not come under the purview of supply and no GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Customs Tariff Heading 8906-Other vessels including warships and lifeboats other than rowing boats. As per entry at Sl.No.252 of Schedule I of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017 parts of goods of heading 8901,8902, 8904, 8905, 8906, 8907 falling under any chapter of the Customs Tariff attracts GST at the rate of 5%. Therefore, if the marine engines are supplied for use as part of vessel falling under Customs Tariff Heading 8906, which are used by the Department of Defense and other agencies for patrol, relief and rescue operations, then the marine engine as part of such vessel will only attract GST at the rate of 5% as per the said entry. - KAR ADRG 74/2021 - - - Dated:- 6-12-2021 - DR. M.P. RAVI PRASAD AND SRI. T. KIRAN REDDY, MEMBER Represented by : Sri John Bosco Deputy Chief executive (Finance) and DAR ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 UNDER SECTION 98(4) OF THE KGST ACT, 2017 M/s South Indian Federation of Fishermen Societies, SIFFS OBM Sales Service Centre, Mulihithlu, Bolar, Mangalore, Dakshina Kannada-575001 having GSTIN 29AACTS0090G1ZH, have filed an application for Advance Ruling under Section 97 of the CGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies are spread throughout the South India. They are having their head office at Trivandrum and branches in various parts of Tamilnadu and Karnataka. All these branches are having separate registration under the GST Act in the respective States. 5.3 The applicant's Head office in Trivandrum is manufacturing as well as procuring the fishing requisites in large quantities from various places and also importing from abroad. These items are subsequently transferred to their Branches in various places in South India for supply to the fishermen. 5.4 The applicant states that the fishing community is one of the most backward and vulnerable communities in India and currently struggling to cope up with the limited income due to decline in fish catch for several reasons including climate change and natural disasters. 5.5 This office has received the comments from the office of the Commissioner of the Central Excise and Central tax (GST) Mangalore -575003 dated 11th October 2021 are furnished as under: Para 1: Rate of tax on Marine Engines coming under HSN Code 8407 and its spare parts exclusively used as part of fishing vessel of heading 8902. The Department of Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for use as part of fishing vessels will attract GST at the rate of 5% (2.5%-CGST+2.5%-SGST) as per Sl.No.25(ii) of the Notification No.11/2017-Central Tax (rate) dated 28.06.2017. Para 4: Rate of tax on puff insulated ice boxes used by fishermen in fishing vessels for reducing spoilage and maintaining good hygiene. The puff insulated ice boxes product falls under Customs Tariff Head 3933 and is liable to GST at the rate of 18% (9%-COST + 9%-SGST) as per entry at SI.No. 108 of Schedule HI of Notification No.01/2017 Central Tax (Rate) dated 28.09.2017. Para 5: Rate of tax on marine engine coming under HSN Code 8407 supplied to Defence Department for patrol, flood relief and rescue operations. Going by the comments submitted in para 1 above, the marine engine which falls under Customs Tariff Heading 8407 when supplied for use as part of vessels falling under Customs Tariff Heading 8906 (Other Vessels, including warships) which covers vessels for Defence and other agencies used for patrol, relief and rescue operations) will attract GST at the rate of 5% (2.5%- CGST + 2.5%-SGST) as per entry at Sl.No..252 of Schedule I of Notification No.01/2017 Central Tax (Rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, the same is also clarified by the CBIC vide Circular No.52/26/2018-GST dated 09.08.2018. The relevant Para 10.1 of the circular reads as under. 10.1 Applicability of GST on marine engine: Reference has been received seeking clarification regarding GST rates on Marine Engine. The fishing vessels are classifiable under heading 8902, and attract GST @ 5%, as per Sl.No.247 of Schedule I of the Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017. Further, parts of goods of heading 8902, falling under any chapter also attracts GST rate of 5%, vide Sl.No.252 of Schedule I of the said notification. The Marine engine for fishing vessels falling under Tariff item 8904 10 93 of the Customs Tariff Act, 1975 would attract a GST rate of 5% by virtue of Sl.No.252 of Schedule I of the Notification No.01/2017-Central Tax (Rate) dated: 28.06.2017. 10.2 Therefore, it is clarified that marine engine and its spare parts supplied for use in fishing vessels (being a part of the fishing vessel), falling under tariff item 8408 10 93 attracts 5% GST. Thus, marine engines and spare parts used for fishing vessels (being part of the fishing vessel) attract 5% GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of maintenance or repair of fishing vessels there is supply of goods/spare parts, there is no transfer of title in the goods/spare parts as such and hence the supply of goods/ spare parts are ancillary to the repair or maintenance of the fishing vessels. Hence the predominant element of the supply is not the transfer of title in goods/spare parts but that of service of repair or maintenance and the supply of goods/spare parts being ancillary/incidental to the activity of repair or maintenance it is appropriately classifiable under Heading 9987-998714 - Maintenance and repair of transport machinery and equipment under the Scheme of Classification of Services notified as Annexure to Notification No.11/2017 Central Tax (Rate) dated 28.06.2017 and is liable to GST at the rate of 18% (9%-CGST+9%-KGST) as per SI.No.25(ii) of the Notification No.11/2017 Central Tax (Rate) dated 28.06.2017. 13. The fourth question sought by the applicant pertains to rate of tax on puff insulated ice boxes used by fishermen in fishing vessels for reducing spoilage and maintaining good hygiene. The puff insulated ice boxes are appropriately classifiable under Customs Tariff Heading 3923 10 30 - Articles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t come under the purview of supply in terms of Section 7 of the CGST Act, 2017 and no GST is leviable in such free of cost replacements/ labour services. iii. The activity of repair of fishing vessels is a composite supply involving supply of material/ spares which is ancillary to the predominant supply of services. The supply is appropriately classifiable under Heading 9987-998714 - Maintenance and repair of transport machinery and equipment and vide Sl.No.25(ii) of the Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 the supply is liable to GST at the rate 18% (9%-CGST+9%-KGST). iv. The puff insulated ice boxes are appropriately classifiable under Customs Tariff Heading 3923 10 30 - Articles for the conveyance or packing of goods, made of plastics - Boxes, cases, crates and similar articles - Insulated ware. The said articles falling under Customs Tariff Head 3923 are liable to GST at the rate of 18% [9% - CGST +9%-KGST] as per entry at Sl.No.108 of Schedule III of Notification No.01/ 2017 Central Tax (Rate) dated 28.06.2017. v. Marine engines supplied for use as part of vessel falling under Customs Tariff Heading 8906, which are used by the Department of Def ..... X X X X Extracts X X X X X X X X Extracts X X X X
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