5% GST on Supply for Marine Engines used for Defense, Patrolling, Flood Relief, Rescue Operations: AAR [Read Order]

The Maharashtra Authority of Advance Ruling (AAR) ruled that the 5% GST on Supply for marine Engines used for defense, patrolling, flood relief, and rescue operations.

The applicant, M/s Ocean Blue Boating Pvt Ltd, the applicant is in the business of Importing Marine Propulsion RADIANCE RULIN Engine under HSN Code 8407, 8408 & spare parts of marine propulsion engines under HSN Code 8409, supplying the same in local market for use as a part of fishing vessels, Police, Defense department, Patrol, flood relief & rescue department and others.

The applicant sought the advance ruling whether GST rate of 5% can be charged on supply of marine engines of heading 8407 and heading 8408 and/or their spare parts of heading 8409 without considering its general tax rate as per the entry of schedule I, Sl. No. 252 of Notification No. 1/2017-Central Tax (Rate), Dated 28 06-2017, on the basis of its ultimate used as part of fishing vessel of heading 8902 and whether GST rate of 5% can be charged on supply of marine engines of heading 8407 and heading 8408 and/or their spare parts of heading 8409 when it is supplied for use of defense purpose, patrolling purpose, flood relief and rescue operations being part of heading 8901, 8904. 8905, 8906, 8907.

The coram of members, Rajiv Mango and T.R. Ramnani ruled that GST rate of 5% can be charged on supply of marine engines of heading 8407 and heading 8408 and/or their spare parts of heading 8409 covered under Sr. No. 252 of Notification No. 1/2017-C.T.(Rate), dated 28-6-2017 only when it is supplied for use in ships/vessels covered under headings 8901, 8902, 8904, 8905, 8906, 8907 of the GST Tariff, which may be used for defense purpose, patrolling purpose, flood relief and rescue operations. However, Goods which do not conform to “parts of marine engines” will not be covered under the said SA No. 252 of Notification No. 1/2017-C.T.(Rate), dated 28-6-2017.

“Marine engine of heading 8407 and heading 8408, and parts thereof of heading 8409 will be covered under Sr. No. 252 of Notification No. 1/2017-C.T.(Rate), dated 28-6-2017, when used in fishing vessels falling under HSN 8902 of the GST Tariff, as in the subject case. Goods which do not conform to “parts of marine engines” will not be covered under the said Sr. No. 252 of Notification No. 1/2017-C.T.(Rate), dated 28-6-2017,” the AAR said.

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