In re A S Moloobhoy Private Limited (GST AAR Maharashtra)
Question :-Whether the supply of Global Positioning System, Echo Sounder, Radio Detecting and Ranging, Electronic Charts Display & Information System, Gyroscope, Automatic Identification System, Doppler Speed Log, Medium/High Frequency Communication, Very High frequency, Satellite Communication/FIeet Broad band, Ship Security Alert System, Navigational Telex, Emergency Positioning Indicating radio Beacon, Voyage Data Recorder, Non Directional Beacon, Fish Finder, Sound Navigation and Ranging, Life saving/ Fire Fighting Appliances, Bridge Navigation Watch Alarm System, Search and Rescue Transponder, Anemometer and Walkie talkie is classifiable as “Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 897” under entry 252 of Schedule 1 of CST Notification No. 01/2017-Central tax (rate) dated 28th June, 2017 as amended and liable to GST @ 5% (CGST-2.5% and SGST-2.5%) or IGST @ 5% or not.
Answer:- In view of the discussions in the ‘Observations’ section out of the goods listed in Annexure I-A, only those goods that are used in equipments mentioned at Sr. Nos A, B, C, D, E, G, H, I, K, M and S of the table will liable to GST @ 5% (CGST-2.5% and SGST-2.5%) or IGST @ 5% under entry 252 of Schedule 1 of GST Notification No. 01/2017-Central tax (rate) dated 28th June, 2017 as amended and schedule 1 of Notification No. 01/2017-Integrated Tax (Rate), dated 28-06-2017 as amended.
Also Read AAAR Ruling- AIS, NAVTEX & amp; SART are covered by Notification No. 1/2017-C.T. (Rate)
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, MAHARASHTRA
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by A S Moloobhoy Private Limited , the applicant, seeking an advance ruling in respect of the following question.
The Applicant requests this Hon’ble Authority to decide as to whether the supply of goods [as listed in Annexure I-A of this ARA application] is classifiable as “Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 897” under entry 252 of Schedule 1 of GST Notification No. 01/2017-Central tax (rate) dated 28th June, 2017 as amended and liable to GST @ 5% (CGST-2.5% and SGST-2.5%) or IGST @ 5% or not.
At the outset, we would like to make it clear that the provisions of both the CGST Act and the GST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the “GST Act”.
02. FACTS AND CONTENTION – AS PER THE APPLICANT
The submission (Brief facts of the case), as reproduced verbatim, could be seen thus –
STATEMENT OF THE RELEVANT FACTS HAVING A BEARING ON THE QUESTION(S) ON WHICH THE ADVANCE RULING IS SOUGHT
1. This Application is being filed by A. S. Moloobhoy Private Limited (‘the Applicant’/’the Company’). The Applicant, having Good and Service Tax (‘GST’) Registration No. 27AAMCA4160E1ZT is inter alia engaged in the business of sale and distribution of Marine Distress Signals, EPIRB and SART, SSAS, Marine Chemicals, Navigation and Communication (NAVCOM) Equipment and also providing Life Saving services: such as Life raft, Lifeboat and Fire-fighting services, including Pyrotechnic Disposal, Electronic Services and Training Services related to the Marine Industry.
2. Applicant imports various goods/spares, which are supplied on ships and these equipment form an essential part of the ship, and makes the ship “sea worthy.”
3. The above referred goods are imported by the applicant on payment of IGST. The detailed list of HSN codes of such imported goods along with the applicable tax rates is attached herewith at Annexure I-A.
The sample copies of illustrative Bill Of Entry for such imports are enclosed at Annexure I-B, I-C, I-D, I-E, I-F & I-G.
4. Applicant levies GST on parts/equipment supplied by it on the ship by classifying it under the same tariff head under which the goods are imported. The applicant discharges GST liability on supply based on rates applicable to such tariff entry. For instance, a “Standard Solas Model” is classified under tariff head of “8479” captioned as “Ship Spares” and is therefore taxed at the rate of 18%.
5. Applicant has been receiving the purchase orders for such parts/spares/equipment from reputed customers wherein orders are placed on specific terms that applicable GST rate on items ordered is 5% as all such parts and equipment ordered are forming part of ship. The customers strongly contend that the relevant tax entry for taking such goods is Sr.No.252 of Notification No.1/2017 Central Tax which specifically covers Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907. There has been e mail exchange from reputed customer on this point. The copy of relevant purchase orders and emails are enclosed at Annexure 1-H, I-I, I-J, I-K & I-L.
6. Based on the information from customers and market trend, applicant also feels that GST rate should be 5% on the goods supplied by it as same are essential part of ship which makes the ship seaworthy. It is legally ‘obligatory for ships to have fitment/installation of all such spares and equipment to qualify as seaworthy. These parts/equipment should therefore be classified under the tariff heading of “Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907.”
