The Maharashtra Authority of Advance Ruling (AAR) held that 5% GST payable on parts of diesel marine engine or genset supplied to the Indian Navy.
The applicant, Mis Cummins India Limited manufactures diesel and natural gas engines, power generation systems, etc. The applicant’s business, broadly, comprises these three segments which includes Distribution business, wherein Applicant provides products, packages, services and solutions for ensuring uptime of equipment supplied provides parts, new and rebuilt engines, batteries, varied services and customer support solutions.
Subject application is made to seek ruling in respect of all such parts meant for and supplied for ships and vessels of the Indian Navy, and which are used in ships or vessels of the Indian Navy. Applicant supplies parts such as sea water pump, gasket, connection, link injector plunger, gasket flange, seals, shield for shut of the valve, thermostat, plug injector orifice, etc. to the Indian Navy for their use and fit-out in the marine diesel engine or genset of the ships and vessels.
The applicant has sought the advance ruling on the issue whether parts of diesel marine engine or genset supplied or to be supplied by the Applic to the Indian Navy are chargeable to 5% IGST or 2.5% CGST +2.5% SGST as ‘parts of heading of 8902, 8904, 8905, 8906 and 8907 in terms of Sr. No. 252 of Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017.
The coram of Rajiv Magoo and T.R.Ramnani ruled that parts of diesel marine engine or genset supplied or to be supplied by the Applic to the Indian Navy are chargeable to 5% GST only if they are used in diesel marine engine or genset which are further used in ships and vessels falling under chapter headings 8902, 8904, 8905, 8906 and 8907 of the GST Tariff.
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