The Authority for Advance Ruling ( AAR ), Kerala has held that the commodities such as marine propellers, rudder set, stern tube set, propeller shaft and M.S. Shaft for couplings used as a part of fishing and floating vessels would be taxable at the rate of 5 per cent under the Goods and Services Tax (GST) regime.
The applicant, Sri. Dharsak.V.P., Saraswathi Metal Industries is a manufacturer of marine propeller, rudder set, stern tube set, propeller shaft and M.S. Shaft for couplings.
Before the authority, the applicant has argued that all the above products are used in fishing/floating vessels. Since the products manufactured by the unit are mainly used for the purpose of fishing and other allied activities, the applicant is of the opinion that the rate of tax applicable to the above products is 5%as per entry 247 and 252 of Schedule 1 of the Central Notification 1/17.
The authority noted that the parts of fishing vessels, factory ships and other vessels for processing or preserving fishery products are taxable @ 5% by virtue of entry 252 of first schedule of SRO 360/2017. Fishing vessels; factory ships and other vessels comes under the HSN code 8902.
Analyzing the relevant provisions of the notification, the authority noted held that “the classification of the commodities under Entry 252 solely depends on the nature of use to which the commodities are put to. 6. In view of the aforesaid position, commodities such as marine propellers, rudder set, stern tube set, propeller shaft and M.S. Shaft for couplings used only for the purposes of fishing/ floating vessels would be taxable @ 5%. If the said commodities are used for some other purpose, then the applicable tax rate would be 18%.”
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