Case Law Details
In re Mazagon Dock Shipbuilders Limited (GST AAR Maharashtra)
Issue that is raised before us by the applicant is whether the inputs mentioned in Annexure B of the application, which are used for constructing the warships and submarines are forming parts of such warships/submarines and therefore chargeable to reduced tax @ 5% under Sr.No.252 of Notification No.1/2017 Central Tax (Rate) dated 28.06.2017. There are 3 Annexure B’s submitted by the applicant. The first Annexure B containing 96 entries pertains to P-15 B EQUIPMENT LIST. The second Annexure B containing 6 entries pertains to P-15 B MATERIAL LIST. The third Annexure B containing 35 entries pertains to P-15 B CONSUMABLES LIST.
Considering the meaning of an expression (Part) as given in the dictionary and also the ratio as adopted by the Hon’ble Courts as mentioned above besides common parlance test, we now take up each and every input claimed by the applicant to be parts of a warship/submarine [as listed in Annexure B of this ARA application] and discuss and find out whether each of the subject goods/spares can be considered as parts of warship/submarine.
The classification of goods under Sr. No. 252 depends solely on the nature of use to which the goods are put to. We first take up the 96 items mentioned in Annexure B, P-15B Equipment List. We find that except the equipments mentioned in Sr. Nos. 5,13, 58, 60, 62, 70, 82, 84, 92, 95, all other equipments can be considered to be an essential part of a warship/submarine without which the ship would not be complete and would not be able to function.
Now we take up the 6 items mentioned in Annexure B, P-15B Material List. The list contains steel items like steel plates/profiles/sections, M/S. Angles, flat bars, channels, etc. We find that these are metals used for constructing a warship/submarine and are consumed in the process of construction. The said metals cannot be removed as such for repairs etc., and will therefore be considered as consumables and therefore cannot be considered as parts of a warship/submarine.
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