The Authority of Advance Ruling (AAR), Kerala has recently clarified that, The marine engine and its spare parts supplied for use in vessels falling under Customs Tariff Heading 8902 (Fishing Vessels) shall attract Goods and Services Tax (GST) at the rate of 5% [Central Goods and Services Tax (CGST) 2.5% and State Goods and Services Tax (SGST) 2.5%].
The applicant, M/s. Kerala State Co-operative Federation for Fisheries Development Limited (Matsyafed) applied to the AAR seeking clarification in the GST Rates applicable on marine engines of Heading 8407, being the part of fishing vessels of Heading 8902 and parts of the same.
The applicant has been paying Integrated Goods and Services Tax (IGST) at 28% at the time of import of marine engines and their parts hence charging and collecting the same on subsequent supply to the fishermen and paying the same to the Government.
Recently, in an application filed by M/s. South Indian Federation of Fishermen Societies, Trivandrum, the Authority of Advance Ruling, Kerala, held in Advance Ruling NO.KER/10/2021 dtd.25-05-2021 that marine engines and their spare parts supplied by them for fishing vessels of heading 8902 would attract a GST rate of 5% only. It was submitted by Matsyafed that the same shall be applied to their supplies also.
It was ruled that, “The marine engine and its spare parts supplied for use in vessels falling under Customs Tariff Heading 8902 shall attract GST at the rate of 5%”
Reasoning for the same was given as “[2.5% CGST + 2.5% SGST] as per entry at SI No. 252 of Schedule I of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017” and it was clarified that “If it is supplied for use other than as parts of fishing vessels as stated above, GST at the rate applicable under the respective Customs Tariff Headings in which they are classified will apply.”
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