The West Bengal Authority for Advance Ruling has ruled that supply of stores to foreign going vessels, as defined under section 2(21) of the Customs Act, 1962 Act, is not export or zero-rated supply unless it is marked specifically for a location outside India.
The bench constituted of Ms Susmita Bhattacharya, Joint Commissioner, CGST & CX Mr Parthasarathi Dey, Senior Joint Commissioner, SGST.
The ruling was made while deciding on an application by Shewralan Company Pvt Ltd. The application claimed that it supplies foreign going vessels stores like paint, rope, spare parts, electronic equipment etc. The applicant sought a ruling on whether it is liable to pay tax on such supplies to foreign going vessels. More specifically, it wants to know whether such supplies are zero-rated supplies.
The applicants relied on Section 8B(a) and Section 89of the 1962 Act to argue that supply of stores in a foreign going vessel is export and a zero-rated supply in terms of section 16 of the IGST Act.
The Authority held that the “specific Foreign going vessels obtain stores and spare parts while staying anchored at a port in India. There is no reason why the part of such stores that the crew consume or is used for repairing or servicing of the vessel while in India should be treated as export”.
The Authority also held that, “A foreign going vessel anchored within the territory of India is not a place outside India and taking the stores on board such a vessel does not amount to supply to a location outside India”.
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