GST Rate of 5% Applicable on SFDS: Advance Ruling of AAR Reversed

Andhra Pradesh Appellate Authority of Advance Ruling (AAAR) in the matter of Bharat Dynamics Limited has ruled out that GST is applicable on Submarine Fired Decoy System.

The Question was that Whether the Submarine Fired Decoy System (SFDS) supplied by the applicant is classifiable as ‘parts of submarine’ under Chapter Heading 8906 and, therefore, attract a GST rate of five (5%) by virtue of entry no. 252 of Schedule I in Notification No. 1/2017-Integrated Tax (Rate) dated 28.07.2017?

The Appellate Authority Ruled Out that “We differ with the ruling of the Advance Ruling Authority and hereby modify the same and hold that the SFDS is classifiable as ‘parts of Submarine’ falling under Chapter 8906 and consequently attract a GST rate of five (5) percent, by virtue of entry No.252 of Schedule I in Notification No. 12/2017 -Central Tax (Rate) Dated 28.06.2017.”

The appellant, M/s Bharat Dynamics Limited (BDL), a Government of lndia Enterprise under the Ministry of Defence is a manufacturing base for guided missiles and allied Defence equipment. The applicant is engaged in  supply of Submarine Fired Decoy System (hereinafter referred to as ‘SFDS’) along with associated services. The aforesaid supply shall be executed at the applicant’s unit in Andhra Pradesh with principal place of business at Autonagar, Gajuwaka, V1sakhapatnam, Andhra Pradesh.

The Ruling was made by Sri Suresh Kishnani (Member) (Central Tax) and Sri S. Ravi Shankar Narayan (Member) (State Tax).

To Read Ruling Download PDF Given Below :