The Karnataka Authority of Advance Ruling (AAR) has ruled that 5% GST is payable on Outboard motors of marine engines and its spare parts supplied for fishing vessels.
The applicant, Sea Men Associate stated that they are into the business of retail and wholesale dealers in Goods and Accessories relating to marine equipment and Outboard Motors falling under HSN Code 8407/8408 imported from outside the country at the rate of 28%.
The applicant states that they are supplying Outboard Marine Motors at the rate of 28% on the interstate as well as intrastate supply. He also states that the said Outboard Marine Motors are classified under heading 8902 by other taxpayers and selling the same to fisherman boat and collecting GST at the rate of 5% as per serial number 247 of the Schedule 1 of the notification No 01/2017-Central Tax (Rate) dated 28.06.2017.
The applicant further contends that they have been supplying 2.5 HP and 5 HP Outboard Marine Motors exclusively for fishing vessels. And also, the applicant has furnished sample copies of invoices pertaining to the supply of marine engine spare parts such as Jig hook at the rate of 12% for the tax period up to August 2021 and subsequently classifying the said goods under HSN 9507 at the rate of 5%.
The applicant has sought the advance ruling on the issue Rate of GST on the supply of Outboard Motors to unregistered fishermen and whether the HSN Code for the same is 8407 or 8408
The Coram of Dr. M.P.Ravi Prasad and T.Kiran Reddy has held that the Outboard motors (marine engine) and its spare parts supplied for fishing vessel(for use as part of the fishing vessel- CTH 8902) shall attract GST at the rate of 5% (2.5%-CGST + 2.5%-KGST) as per entry at SL.No.252 of Schedule I of Notification No.01/2017 Central Tax, (Rate) dated 28.06.2017. If it is supplied for use other than as parts of fishing vessels GST shall be applicable at the rate of tax on such goods under the respective Customs Tariff Heading classified.
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