TMI Blog2022 (10) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... r entry in Sl. No. 252 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907 falling under any chapter of the Customs Tariff attracts GST at the rate of 5 %. Therefore, if the Outboard motors are supplied for use as part of a fishing vessel falling under Customs Tariff Heading 8902, then OBM as part of the fishing vessel will only attract GST at the rate of 5% as per the entry at Sl. No. 252 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. Therefore, if the Outboard motors are supplied for use as part of a fishing vessel falling under Customs Tariff Heading 8902, then OBM as part of the fishing vessel will only attract GST at the rate of 5%. as per entry at Sl. No. 252 of Schedule I of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. If it is supplied for use other than as parts of goods of headings 8901, 8902, 8904, 8905, 8906 and 8907, GST at the rate applicable under the respective Customs Tariff Headings in which they are classified will apply. - KER/137/2021 - - - Dated:- 1-6-2022 - DR S.L. SREEPARVATHY, IRS AND SHRI ABRAHAM RENN S. IRS, MEMBER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otorized method of propelling small watercraft. The applicant sells these OBMs mainly to fishermen, dealers authorized service centres, boat builders, Government agencies and the Defence Department. The outboard motors are designed to operate only in marine and freshwater. They can be operated only by fitting the motor to a boat. The cooling system of the outboard motor is designed to take water through the propellers and hence the engine cannot be operated out of water. These are water-cooled engines and not air-cooled. The OBM cannot be utilized unless otherwise fitted on the boat even for doing service the OBM is put into a water tank to attend to repairs and maintenance. 4.2. The applicant requested an advance ruling regarding the classification and the rate applicable for sales of OBMs to fishermen and other Government agencies and other purposes including sales done through dealers' authorized service centres and boat builders. 4.3. The applicant further states that Section 97(2) of the CGST/SGST Act, 2017 stipulates the questions on which an advance ruling may be sought. An advance ruling is sought on the issues relating to clauses of Section 97 (2) (a) (b) relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Unit) has already issued a clarification vide Circular No.52/26/2018-GST dated 09.08.2018 that 'Reference has been received regarding GST rates on a marine engine. The fishing vessels are classifiable under heading 8902 and attract GST @ 5% as per Sl. No. 247 of Schedule I of Notification No. 01/2017-CT(R) dated 28-06-2017. Further parts of goods of heading 8902, falling under any chapter also attract GST rate of 5% vide Sl. No. 252 of Schedule I of the said notification. Marine engine for fishing vessels falling under Tariff item 8408 10 93 of the Customs Tariff Act 1975 would attract a GST rate of 5% under Sl. No. 252 of Schedule I of the Notification No.01/2017-CT(R) dated 28-06-2017. 4.6. The applicant submits that from the circular referred above it is inferred that parts of goods falling under headings 8901, 8902, 8904, 8905, 8906 and 8907 falling under any chapter will attract 5% GST. Therefore, OBMs imported under Tariff 8407 21 00 forming part of marine vessels will attract GST at the rate of 5% and not 28%. The applicant makes supplies of OBM for fishing boats and other vessels owned by the Defence Department Management Agencies, Marine Police and other agencies t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e application. 7. Discussion and Findings: 7.1. The issue was examined in detail. The application is admissible as per subsection (2) of Section 97 of the CGST Act. The question raised is regarding the rate of GST applicable to outboard motors of HS Code 8407 and its spare parts as per Entry in Schedule I, Sl. No.252 of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017, and regarding the applicability of clarification issued vide Circular No.52/26/2018-GST (Point 10.1) in respect of the issue. 7.2. We have gone through the contentions of the applicant and the specific remarks offered by the jurisdictional officer. To classify the products, the provisions of Notification No 01/2017 Central Tax (Rate) dated 28.06.2017 are to be verified. The Outboard motors imported by the applicant are classified under Customs Tariff Heading 8407 21 00 - Outboard motors - Marine Propulsion engines - Spark-ignition reciprocating or rotary internal combustion piston engines and attract GST at the rate of 28% as per entry at Sl. No. 114 of Schedule IV of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. Fishing vessels, factory ships, and other vessels for processing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Customs Tariff attract GST at the rate of 5%. Therefore, if the Outboard motors are supplied for use as part of a fishing vessel falling under Customs Tariff Heading 8902, then OBM as part of the fishing vessel will only 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 (Rate) dated 28.06.2017. If it is supplied for use other than as parts of goods of headings 8901, 8902, 8904, 8905, 8906 and 8907 as stated above, GST at the rate applicable under the respective Customs Tariff Headings in which they are classified will apply. Given the observations stated above, the following rulings are issued; RULING 1. Whether the GST rate of 5% for outboard motors pertaining to HS code 8407 and its spare parts as per Entry in Sl. No. 252 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 is applicable to supplies made by the applicant; that the GST rate of 28% shown in Schedule IV Sl. No.114 is not applicable for sales made by the applicant. Ruling : The Out Board Motors and its spare parts supplied for use in vessels falling under Customs Tariff Heading 8902 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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