GST Rate of 5% Applicable on Repair and Maintenance of Marine Engine and other Parts of Fishing Boats

The applicant, Smmarains Advances Gear Boxes India Private Limited, runs the business of Marine engines and marine gear boxes, where it buys and sells marine engines and their spares, marine engine oil. The applicant also gives maintenance and repair services for boat engines, gearboxes, and other fishing boat components. The applicant imports these products from a Chinese company and distributes them to the fishing community and boat builders across 11 states through 38 branches.

Question Asked by Applicant

“1. Whether the Marine engine (HSN:84081093) and its spares (84099990) of customs Tariff act 1975 as adopted to GST can be treated as parts of heading of 8902, 8904, 8905, 8906 and 8907 and applicability of 5% of IGST (CGST 2.5+SGST 2.5) as per serial No.252 of Schedule-I of the Notification No.01/2017 Central Tax dated 28.06.2017 & State Notification, No. S.R.O.360/2017.

2. Applicability of GST Rate of 5% Marine Gear box (84834000) and Can be treated as parts of heading of 8902, 8904, 8905, 8906 and 8907 fishing vessel heading 8902 as per serial No.252 of Scheduled I of the Notification No.01/2017 Central Tax dated 28.06.2017 & State Notification No. S.R.O.360/2017.

3. Applicability of 5% IGST (CGST 2.5+SGST 2.5) on Maintenance and repair service of Marine engine and Gear and other parts of fishing boat, as per Notification 02/2021-Integrated Tax (Rate) & 02/2021- CGST (Rate) dated 02/06/2021 is correct or not.

4. Marine Fuel 5% as per Notification CGST Rate 14/2019 dated 30/09/2019, is the same rate 5% applicable to Marine engine oil?”

Kerala AAR Decision

GST Rate of 5% (2.5% CGST + 2.5% SGST) is applicable only if the marine engine or its spares are supplied to be used as parts of goods that fall under headings 8902, 8904, 8905, 8906, or 8907. If used for other purposes, GST will be charged at the normal rate applicable under their own Customs Tariff classification.

GST Rate of 5% (2.5% CGST + 2.5% SGST) is applicable only if the marine gearboxes are supplied for goods that fall under headings 8902, 8904, 8905, 8906, or 8907. If the marine gearboxes are supplied for other purposes, GST will be applicable as per their Customs Tariff classification.

As per Notification No. 02/2021-Central Tax (Rate) dated 02.06.2021, from June 2, 2021, maintenance and repair services for marine engines, gear, and boat parts are taxed at 5% GST.

5% GST rate is not applicable in case of Marine Engine Oil, which is classified under HSN Code 27101972.