Commodities such as Marine Propellers, Rudder Set, Stern Tube Set, Propeller Shaft etc. attract 5% GST: AAR [Read Order]

The Authority of Advance Ruling ( AAR ), Kerala held that commodities such as marine propellers, rudder set, stern tube set, propeller shaft and M.S shaft for couplings used as part of fishing /floating vessels would come under Entry 252 of Schedule I of Notification no. 01/2017 Central Tax(Rate) and State Notification 360/2017 and is taxable at 5% (2.5% CGST and 2.5%  SGST).

In the instant case Sri. Dharsak V.P Saraswathi Metal Industries, a manufacturer had preferred an application for advance ruling on the rate of tax of certain commodities used in fishing/floating vessels. The applicant opined that the rate of tax applicable for certain products manufactured by his unit should be taxed at 5% as per Entry 247 and 252 of schedule I of Central notification 1/2017.

Hon’ble Members Senthil Nathan S (Joint Commissioner) and Thulaseedharan Pillai(Joint Commissioner-General) admitted the application.

The Authority observed that as per HSN specified in the application, commodities like marine propellers, rudders for fishing boat, stern tube set for fishing boats, propeller shaft, m s shaft for couplings are to be taxed at 18%. They added that parts for fishing vessels, factory ships and other vessels for processing and preserving fishery products are taxable at 5% by virtue of entry 252 of first schedule of SRO 360/2017 and it is clear that classification of commodities under entry 252 solely depends on the nature of use to which the commodities are put to.

The AAR ruled that commodities such as marine propeller, rudder set, stern tube set, propeller shaft and M.S shaft for couplings used only for the purpose of fishing/floating vessels would be taxable at 5% and if the said commodities are used for other purposes, then applicable tax rate would be 18%.

To Read the full text of the Order CLICK HERE