GST Rate of 5% applicable on Marine propellers, fishing/ floating vessels: AAR

The Kerala Authority of Advance Ruling (AAR Kerala) in the matter of M/s. Bright Metal Works has ruled out that GST Rate of 5% applicable on Marine propellers, fishing/ floating vessels.

Mr. S. Radhakrishnan, Proprietor of M/s. Bright Metal Works (hereinafter referred to as the applicant), is engaged in the manufacturing of marine
propellers, stern tube set, rubber sets, SS propeller shafts, MS shafts for coupling, intermediate shafts and cutlass rubber brushes used in fishing/ floating vessels.

The Question and Ruling are as follows:

Question 1: The tax rate of marine propellers, stern tube set, rudder sct, SS propellers shaft, MS shaft for couplings, and intermediate cutlass rubber bushes.

Ruling: The tax rate of marine propellers, stern tube set, rudder set, SS propellers shaft, MS shaft for couplings and intermediate and cutlass rubber bushes when supplied for use as part of goods of Heading 8901, 8902, 8904, 8905, 8906 or 8907 attracts GST at the rate of 5% (CGST – 2.5% + SGST-2.5%] as per entry at Sl. No. 252 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017.

Question 2: The parts of fishing / floating vessels come under HSN 8902. It is requested to know whether all parts of fishing / floating vessels come under Sl.No.252 of the 1st schedule or Sl. No. 371 of the 3rd Schedule?

Ruling: The goods falling under any chapter when supplied for use as parts of fishing or floating vessels coming under HSN 8902 are taxable at the rate of 5% as per entry at Sl. No.252 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017.

Question 3: Whether the replacement of parts during the warranty period constitute supply under GST?

Ruling: The replacement of parts without consideration during the warranty period is not liable to GST.

Question 4: Whether eligible to avail of 18% input tax credit on the purchase of raw materials, as the manufactured products are taxable @ 5% 247/252 of 1st Schedule.

Ruling: The applicant is eligible to avail of the credit of tax paid on inputs, input services and capital goods subject to the conditions and limitations prescribed under Sections 16, 17 and 18 of the CGST Act, 2017 and the relevant rules made thereunder.

Question 5: Kindly give a ruling specifying the HSN code of cutlass rubber bush.

Ruling: Cutlass Rubber Bush is classifiable under Heading 4016 99 60 of the Customs Tariff Act, 1975.

For Official Ruling Download PDF Given Below: