The Gujarat Authority of Advance Ruling (AAR) ruled that Benefit of reduced GST rate not available on manufacture, supply of marine pressure tight cables and the marine non-pressure tight cables.
The applicant, M/s. Apar Industries ltd. are manufacturers and suppliers of various goods such as Transformer oils, white oil, industrial lubricating oils and specialities oils fallin, Aluminium conductors falling, Various grades of cables, including power/electric cables, house wire cables, marine/pressure tight cables and non-pressure tight cables and other cables, etc. falling under Chapter Heading No.8544 of the Customs Tariff Act.
The applicant has stated that they have received orders and are expecting future orders from the Defence Machinery Design Establishment (DMDE), Department of Defence Research and Development under the Ministry of Defence, Government of India for the supply of Marine-pressure tight and Non-Pressure right cables, specially made and designed for use in the warship as ‘parts’ of warship.
These cables are though universally classified under Tariff Heading No.8544, but made and designed for use in Warship as it’s integral parts, without which warship cannot function and cannot be treated as complete in all respects and at the same time the same is capable of being separated from warship for repairs and replacement and that the Rear Admiral of the Indian Navy, an officer equivalent in rank to the Joint Secretary of the GOI, has issued a Certificate of End User, vide F.No.HLC/85/PT-10 Cables (32 Types)/S4” dated 10.06.2019, to that effect, clearly showing therein the use of cables in warship application and applicability of 5% GST.
They have also stated that they being manufacturer and supplier of goods and an applicant in the present case for Advance Ruling seeks an immediate authority/order about ‘Determination of Liability to pay Tax on the above goods’ to be supplied by them to the Defence Ministry for their use as parts of warship as it involves national interest and its security as the Ministry of Defence needs the supply urgently and immediately.
The applicant sought the advance ruling on the question whether the applicability or determination of liability to pay Tax on our said goods at 5% GST rate is legally correct and in order in terms of Schedule-I of Notification No.1/2017-Integrated Tax (Rate) or not.
The coram consisting of Sanjay Saxena and Mohit Agarwal held that the marine pressure tight cables and the marine non-pressure tight cables manufactured and supplied by the applicant to the Navy are not parts of the warship and hence the benefit of reduced rate of GST of 5% is not available to the applicant as per Notification No.01/2017- Integrated Tax(Rate) dated 28.06.2017.
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