In re Ocean Sparkle Limited (GST AAR Andhra Pradesh)
Basic issue before AAR is whether the Tug Jupiter that the Applicant has let out under a charter for 730 days (with an option to extend the contract one year more) is classifiable under SAC 996602 as ‘Rental Services of water vessels including passenger vessels, freight vessels and the like with or without operator’ attracting GST @5% in terms of SI. No. io(ii) which covers ‘Time charter of vessels for transport of goods’ of Notification No. 1/2018-IT(Rate) dated 25.01.2018 read with Notification No. 8/2017-IT(Rate) dated 28.06.2017 or under SAC 997319 as ‘Leasing or rental services concerning other machinery and equipments with or without operators’ attracting GST @5% in terms of Si. No. 17(viia) of the Notification No. 1/2018-IT(Rate) dated 25.01.2018, as amended by Notification No. 28/2018-IT (Rate) dated 31.12.2018 which covers ‘Leasing or renting of goods’ or attracting GST @5% in terms of SI. No. 17(vii) of the Notification No. 1/2018-IT(Rate) dated 25.01.2018 (as amended), which covers ‘Time charter of vessels for transport of goods’
FULL TEXT OF ORDER OF THE AUTHORITY OF ADVANCE RULING, ANDHRA PRADESH
ORDER
(Under sub-section (4) of Section 98 of Central Goods and Services Tax Act, 2017 and sub- section (4) of Section 98 of Andhra Pradesh Goods and Services Tax Act, 2017)
1. The present application has been filed u/s 97 of 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 Ocean Sparkle Limited, (hereinafter referred to as applicant), registered under the Goods & Service Tax.
2. The provisions of the CGST Act and APGST Act are identical, except for certain provisions. Therefore, unless a specific mention of the dissimilar provision is made, a reference to the CGST Act would also mean a reference to the same provision under the APGST Act. Further, henceforth, for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST or AP GST Act would be mentioned as being under the GST Act.
3. Brief Facts of the case:
M/s. Ocean Sparkle Limited is a company (hereinafter referred to as the Applicant) incorporated on 26th July 1995 having its registered address at Plot No 128, Srinagar Colony, Hyderabad, Telangana. The applicant is engaged in the business of providing comprehensive port operations and management services which inter alia includes provision of technical management of marine crafts, harbour towage services, mooring services, pilotage services etc.
The applicant had filed an application in form GST ARA-01, Dt:31.07.2019, by paying required amount of fee for seeking Advance Ruling on the following issues, as mentioned below.
4. Question raised before the Authority:
This application for Advance Ruling is being filed seeking the rate of IGST on vessel charter hire charges?
On Verification of basic information of the applicant, it is observed that the applicant falls under State jurisdiction, i.e. Assistant Commissioner (ST), Kakinada Circle. Accordingly, the application has been forwarded to the jurisdictional officer and a copy marked to the Central Tax authorities to offer their remarks as per Sec. 98(1) of CGST /APGST Act 2017.
In response, remarks are received from the jurisdictional officer concerned stating that there are no proceedings lying pending or passed relating to the applicant on the issue, for which the Advance Ruling sought by the applicant.
5. Applicant’s Interpretation of Law and Facts:
5.1. The Applicant submits that the Tug Jupiter let out by it to RIL on charter is correctly classifiable under SAC 996602 as ‘Rental Services of water vessels including passenger vessels, freight vessels and the like with or without operator’ as the said Code covers hiring of water vessel for transportation of good and thus, would attract GST @ 5% in terms of SI. No. 10(ii) which covers ‘Time charter of vessels for transport of goods.’,
5.2. The expression ‘Goods’ has been defined in Section 2(52) of the CGST Act, 2017 to mean “every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply”. The Tug Jupiter has been chartered for undertaking inter-alia the following activities (the primary gamut of activities enlisted at para 7 of the Annexure-I to this application):-
