In re Visakha Trades (GST AAR Andhra Pradesh)
In the case of In re Visakha Trades, the applicant sought clarification regarding the applicable GST rate and input tax credit eligibility for a contract awarded by the Naval Dockyard, Visakhapatnam. The contract involved habitability upgrades onboard the INS Ranveer, including the installation of various fittings and furniture. The applicant argued that the services fall under “Maintenance, Repair, or Overhaul” (MRO) services for ships, qualifying for a concessional 5% GST rate as per Notification No. 11/2017, amended by Notification No. 02/2021. However, the Advance Ruling Authority found that the contract was not for MRO services but rather a works contract involving supply and installation of goods. Since the applicant did not have a maintenance contract with the Naval Dockyard, the concessional GST rate for MRO services was not applicable. The ruling emphasized that the reduced tax rate applies strictly to maintenance and repair services of ships and their parts, not general works contracts. Therefore, the applicant was not eligible for the 5% GST rate.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESH
1. Preamble:
1.1 At the outset we would like to make it clear that the provisions of CGST Act, 2017 and APGST Act, 2017 are in parimateria and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the APGST Act.
