Case Law Details
In re Hindustan Shipyard Limited (GST AAR Andhra Pradesh)
Rectification of AR order under section 102 read with section 97 of Central Goods and Service Tax Act,2017 and Andhra Pradesh Goods and Services Tax Act, 2017) for the order number AAR No. 08/AP/GST/2024 Dt:17-05-2024.
Hindustan Shipyard Limited (HSL) filed a rectification request under the provisions of the CGST Act and APGST Act following a ruling issued on May 17, 2024, by the Authority for Advance Rulings (AAR), Andhra Pradesh. The company sought clarifications on two points in the original ruling, which was received on May 24, 2024. The first issue raised by HSL concerned the applicability of the Integrated Goods and Services Tax (IGST) on the approved list of equipment. HSL requested that the final order specify that the equipment should be chargeable at 5% IGST under Serial No. 252 of Schedule I of Notifications No. 01/2017-Integrated tax and No. 01/2017-Central tax. However, the AAR clarified that since the tax rate under IGST is the sum of CGST and SGST/UGST, no specific mention of IGST was necessary, as the rates for CGST and SGST would be sufficient to apply the same tax rate under IGST. Therefore, HSL’s request was not considered for rectification.
The second issue raised by HSL involved the classification of lifeboats as part of the essential equipment for ships. HSL contested that lifeboats, as listed under Serial Nos. 81 and 89 of Annexure 2A, should be excluded from the list of essential equipment and considered as additional equipment. Upon review, the AAR acknowledged that lifeboats, while required on ships as safety equipment for statutory compliance, do not qualify as essential parts of a warship or submarine but are instead classified as additional equipment. Consequently, the rectification was made to clarify that lifeboats are not part of the essential equipment but should be considered additional equipment on the vessel. As a result, the AAR issued a rectified order reflecting these changes and disposed of the rectification application.
This rectification process highlights the importance of clear classifications for GST purposes, especially regarding essential and additional equipment on ships, ensuring accurate tax treatment under applicable laws.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, ANDHRA PRADESH
(Under Section 102 read with section 97 of Central Goods and Services Tax Act,2017 and the Andhra Pradesh Goods and Services Tax Act, 2017)
(Rectification of order under section 102 read with section 97 of Central Goods and Service Tax Act,2017 and Andhra Pradesh Goods and Services Tax Act, 2017) for the order number AAR No.08/ AP/GST/2024 Dated:17.05.2024
The present application has been filed u/s 102read with section 97of the Central Goods & Services Tax Act, 2017 and AP Goods & Services Tax Act, 2017 (hereinafter referred to CGST Act and APGST Act respectively) by M/s. Hindustan Shipyard Limited(hereinafter referred to as applicant:), registered under the AP Goods & Services Tax Act, 2017.
The applicant has been issued the ruling order vide reference no: AAR No. 08/AP/GST/2024 Dt:17-05-2024 and the same was served to the applicant on dated 24-05-2024. In response to the same, the applicant has filed a rectification application dated: 25-06-2024 and requested certain rectifications for the order as stated supra. The requested rectification is prima facie as per the apparent record. Hence, the application is admitted.
On perusal of the Original order rectification requested by the applicant is discussed hereunder:
1. Applicability of IGST on allowed list of equipment’s:
The applicant requested to rectify the final order by specifically mentioning that the approved list of equipments shall also be chargeable @ 5% (IGST 5%, CGST 2.5% and SGST 2.5%) under serial no.252 of Schedule I of Notification No.01/2017 – Integrated tax (Rate) dated 28.06.2017 and Serial No.252 of Schedule I of Notification No.01/2017 Central tax (Rate) dated 28.06.2017.
The contention of the applicant is examined in the light of the original order and it is to inform that, the tax rate under IGST is sum of CGST and SGST/UGST. Hence, there is no requirement to specifically mention about the rate of tax under IGST. The rate of taxes applicable under CGST/SGST will exact the rate of tax under IGST. Hence, the request of the applicant is not considered to rectify the order.
2. Exclusion of term life boats from being classified as additional equipment’s:
The applicant contended that” in the final order issued, included Lifeboats (Serial No.81 and 89 of Annexure 2A) under the list of equipments essential for a ship/vessel and qualifying as part and chargeable @5% under serial No.252 of the notifications.” And requested for rectification by removing the term “Life boats” from the mentioned paragraph on Page 19 of the final order.
The contention of the applicant has been examined in the light of the original orderand noticed that there are some additional equipments which are required to be made available on a ship as additional safety measure in compliance with certain statutory provisions. Though these are also to be compulsorily made available on a vessel and ship but cannot be taken to be parts of a ship as per general understanding but are rather additional equipments on a ship. Hence the request of the applicant for deletion of the term ” Lifeboat ” in Para no.2 of Page number 19 is not considered.
However, as per the discussions noted in personal hearing Accordingly the original order is amended in para no:2 of page no:21 and serial numbers 81 and 89 are included and these are to be considered not as essential part of a warship/submarine but additional equipment’s.
Para no. 2 of Page 21 is rectified and read as below:
“On careful examination of the items mentioned in annexure 2A, we find that except the equipment’s mentioned in SI. Nos. 25,28„60,72,73,81,89,90,97,111,117,118,119,123,( annexure 2A (i) 124 annexure 2A (ii), all other equipment’s 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.”
Accordingly, the application is hereby “disposed off”.
