In re Marine Vision (GST AAR Maharashtra)
The Maharashtra Authority for Advance Ruling held that marine propulsion engines classified under HSN 8407 and 8408 and their spare parts under HSN 8409 are eligible for concessional GST at 5% when supplied as parts of specified vessels, provided their intended end use is established through verifiable documentary evidence. The Authority ruled that the concession under Serial No. 252 of Schedule I to Notification No. 1/2017-Central Tax (Rate), dated 28 June 2017, applies to parts of vessels falling under headings 8901, 8902, 8904, 8905, 8906 and 8907. However, eligibility cannot be presumed merely because the engines are described as marine engines or are supplied to fishermen, government agencies or defence establishments. The supplier must establish that the goods are actually intended to function as parts of qualifying vessels. In the absence of verification or clear end-use evidence, the normal GST rate applicable to the respective engine or spare-part classification continues to apply.
The applicant, M/s Marine Vision, was engaged in wholesale, retail and service activities and proposed to import marine propulsion engines under HSN 8407 and 8408 and spare parts under HSN 8409. These goods were intended for sale to fishermen and government agencies for installation in fishing boats, patrolling boats, relief boats and rescue vessels. The applicant submitted that marine engines and their spare parts ordinarily attracted GST at 28% under the relevant classification but claimed eligibility for the concessional rate of 5% where the goods were supplied as parts of specified vessels. It therefore sought an advance ruling on whether the concession could be claimed for fishing vessels under heading 8902 and for vessels used in defence, patrolling, flood relief and rescue operations under headings 8901, 8904, 8905, 8906 and 8907.
The applicant relied principally on Serial No. 252 of Schedule I to Notification No. 1/2017-Central Tax (Rate), which provides a concessional rate for parts of goods falling under specified vessel headings. It also referred to Circular No. 52/26/2018-GST, dated 9 August 2018, wherein the CBIC clarified that marine engines supplied as parts of fishing vessels classified under heading 8902 attract GST at 5%, notwithstanding their independent classification under Chapter 84. According to the applicant, marine engines are essential propulsion components of vessels, and the expression “parts” in the notification should therefore include engines and their spare parts. The applicant also relied on the earlier Maharashtra advance ruling in the case of M/s Ocean Blue Boating Private Limited, Order No. GST-ARA-32/2021-22/B-105, dated 6 December 2021, which concerned concessional GST treatment of marine engines and spare parts supplied for fishing, patrolling, relief and rescue boats.
To substantiate the intended use of its supplies, the applicant furnished additional submissions dated 26 November 2025 along with documentary evidence. These included a purchase order from Auto NavCom Marine Solutions dated 7 February 2025 for a Yamaha 40 HP engine intended for a fisherman or rescue application; a declaration dated 16 April 2024 stating that the engines were intended for life-saving or rescue purposes and supply to the Indian Coast Guard; and an invoice issued to Auto NavCom in connection with a Coast Guard vessel. The applicant also submitted a Government e-Marketplace contract with the Indian Navy dated 25 September 2024 and an invoice dated 13 December 2024 for a complete rescue boat system. In relation to supplies to individual fishermen, it furnished a quotation for a Yamaha 9.9 HP engine, a fisherman identity card and an invoice recording the transaction. The applicant maintained that purchase orders, government contracts, buyer declarations, fisherman identity cards and invoices provided a documentary trail establishing the intended end use of the engines and parts.
The jurisdictional officer reported difficulties in verifying the applicant’s business operations and the actual end use of the supplied goods. According to the officer, physical verification revealed that business activities were not being conducted at the declared principal place of business at Ambernath, Thane, and were reportedly being carried out from another location at Gahunje, Pune. The officer consequently stated that it was not possible to verify whether the engines supplied by the applicant were being used as parts of vessels covered by the specified tariff headings or whether the conditions for concessional GST treatment were satisfied. The Authority considered these observations along with the applicant’s documents and submissions.
The Authority examined the classification of marine propulsion engines and their spare parts under headings 8407, 8408 and 8409, together with the vessel classifications covered by the concessional notification. It observed that heading 8901 covers specified vessels for transport of persons or goods; heading 8902 covers fishing vessels, factory ships and other vessels for processing or preserving fishery products; heading 8904 covers tugs and pusher craft; heading 8905 covers specified specialised vessels; heading 8906 includes other vessels such as warships and lifeboats; and heading 8907 covers other floating structures. The Authority held that the concessional entry is directed towards parts of these vessels and is not restricted to goods independently classified under Chapter 89. Consequently, marine engines classified under Chapter 84 can qualify where they are supplied as integral parts of vessels covered by the notification.
The Authority referred to the meaning of the expressions “part” and “spare part” and examined dictionary definitions describing a part as an element or component of a larger article. It also considered the Supreme Court’s discussion in CCE, Bangalore v. Venkateswara Hatcheries (P) Ltd., reported in 1999 (3) SCC 632, concerning the interpretation of the word “part”. The Authority further referred to Jindal Strips v. Collector of Customs, reported in 1997 ECR 98 (Tri. Delhi) and 1997 (94) ELT 234, where the Tribunal examined the ordinary commercial meaning of the expressions “part” and “component”. Applying these principles, the Authority observed that marine engines are essential for the propulsion and functioning of vessels and constitute integral components without which the vessels ordinarily cannot perform their intended functions. It therefore accepted that marine engines and their spare parts can be regarded as parts of vessels falling under the specified headings.
The Authority also considered the earlier advance rulings in M/s Man Energy Solutions India Pvt. Ltd., Order No. ARA-56/2019-20/B-41, dated 30 July 2021, and M/s Ocean Blue Boating Private Limited, Order No. GST-ARA-32/2021-22/B-105, dated 6 December 2021. These rulings were referred to in support of the view that marine engines and their parts can constitute components of vessels for the purposes of the concessional GST entry. The Authority nevertheless emphasised that the availability of the reduced rate depends upon the actual purpose for which the goods are supplied and the supplier’s ability to establish that purpose.
On the applicable rates, the Authority recorded that the normal GST rate for the relevant goods under headings 8407, 8408 and 8409 was 28% up to 21 September 2025 and 18% from 22 September 2025, following changes in the GST rate schedules. However, where the goods qualify as parts of vessels covered by Serial No. 252 of Schedule I to Notification No. 1/2017-Central Tax (Rate), the concessional rate of 5%, comprising 2.5% CGST and 2.5% SGST, may apply. The Authority made clear that the concession is conditional upon the goods being supplied as parts of eligible vessels and does not extend to every sale of marine engines or spare parts irrespective of their eventual use.
The Authority laid particular emphasis on documentary verification. It held that the supplier must demonstrably know and prove the intended end use at the time of supply. A purchaser’s declaration by itself was insufficient unless supported by verifiable evidence. Relevant documents could include purchase orders, government contracts, invoices, valid fisherman identity cards and other records connecting the engines or parts to specified vessels. The Authority therefore adopted the principle that the concessional rate is available only where the goods are demonstrably supplied as parts of vessels falling under headings 8901, 8902, 8904, 8905, 8906 or 8907. Where such verification is absent, the supplier must charge the normal GST rate applicable to the independent classification of the goods.
In its final ruling, the Authority answered both questions conditionally in favour of the applicant. For marine engines under headings 8407 and 8408 and their spare parts under heading 8409 supplied for fishing vessels falling under heading 8902, GST at 5% was held applicable only where the applicant adequately established the end use through verifiable documentary evidence. Similarly, for engines and spare parts supplied as parts of vessels used for defence, patrolling, flood relief and rescue operations under headings 8901, 8904, 8905, 8906 and 8907, the concessional rate was held available only where the intended use was satisfactorily demonstrated. In the absence of verification or clear evidence of end use, the normal GST rate applicable to HSN 8407, 8408 or 8409 would remain applicable. The ruling thus confirms that marine engines and spare parts can qualify for concessional GST as vessel components, but the concession is dependent upon documentary proof establishing their use in the specified categories of vessels.
Cases Discussed
CCE, Bangalore v. Venkateswara Hatcheries (P) Ltd. — 1999 (3) SCC 632 (Supreme Court). The Authority referred to the Supreme Court’s discussion concerning the meaning of the word “part” and its interpretation in the context of the relevant statutory provisions. The decision was considered while determining whether marine engines could qualify as parts of vessels.
Jindal Strips v. Collector of Customs — 1997 ECR 98 (Tri. Delhi); 1997 (94) ELT 234 (Tribunal). The Authority referred to the Tribunal’s interpretation of the expressions “part” and “component” and their ordinary commercial meaning. The decision supported examination of whether an article forms an integral constituent of a larger article.
Related Advance Ruling Discussed
In re Ocean Blue Boating Private Limited — Maharashtra Authority for Advance Ruling, Order No. GST-ARA-32/2021-22/B-105, dated 6 December 2021. The applicant relied on this ruling concerning concessional GST treatment of marine engines and spare parts supplied for fishing, patrolling, relief and rescue boats. The Authority also referred to its earlier treatment of marine engines as parts of eligible vessels.
