In Re SM Marains Advances Gear Boxes India Private Limited (GST CAAR Mumbai)
Customs Authority for Advance Ruling (CAAR) in Mumbai has ruled that the import of marine engines, their spare parts, and marine gearboxes intended for use in fishing boats will attract a 5% Integrated Goods and Services Tax (IGST) rate. The ruling came in response to an application filed by In Re SM Marains Advances Gear Boxes India Private Limited.
The applicant sought clarification on the applicable IGST rate for these imported goods, which are specifically designed and certified by a Chartered Engineer as essential components exclusively for fishing vessels. The certificate stated that these items are integral to the operation of fishing boats and cannot be used in automobiles or other industries. The applicant argued that since these goods are parts of vessels classified under heading 8902 of the GST tariff, which attract a 5% GST rate, the same concessional rate should apply to their imported components.
In its analysis, CAAR Mumbai referred to a GST circular issued by the Tax Research Unit (TRU) in August 2018. The circular clarified that marine engines for fishing vessels, falling under tariff item 8408 1093 of the Customs Tariff Act, 1975, would also attract a 5% GST rate by virtue of entry No. 252 of Schedule I of Notification No. 01/2017-Central Tax (Rate) dated June 28, 2017. This entry specifically covers “parts of goods of heading 8902, falling under any chapter.”
The authority also took into consideration a previous ruling by the Authority for Advance Ruling (AAR) in Maharashtra concerning SHANDON HEAVY INDUSTRY INDIA PVT. LTD. In that case, the AAR had held that marine engines and gearboxes supplied for use in vessels classified under various headings, including 8902 (fishing vessels), would be taxed at 5% IGST, provided they are indeed used as parts of such vessels and not diverted for other purposes.
Based on the submitted facts, the Chartered Engineer’s certification, the GST circular, and the precedent set by the Maharashtra AAR, CAAR Mumbai concluded that the imported marine engines, their spares, and marine gearboxes intended for use as parts of fishing boats are eligible for the 5% IGST rate as per entry No. 252 of Schedule I of Notification No. 01/IGST(Rate) dated June 28, 2017.
FULL TEXT OF THE ORDER OF CUSTOMS AUTHORITY OF ADVANCE RULING, MUMBAI
