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2019 (7) TMI 808 - AAR - GSTClassification of goods - parts of vessels or not - Triple Screw Pumps Parts - whether falling under Chapter Heading 8413 can be treated as Parts of HSN 8901, 8902, 8904, 8905, 8906, 8907 or otherwise? - levy of IGST or CGST? - scope of supply - HELD THAT - Equipment supplied under the above purchase Orders are meant for Parts of Vessels / Warship and it is also seen from the purchase order, invoices that the Forced Lubrication Pumps, Emergency Lube Oil Pumps, DG Lub Oil Transfer Pumps and Triple Screw Pumps with spares and parts are parts of vessels of the Indian Navy to be installed on the Navy vessels. The goods supplied by the applicant are covered under chapter 8413 and as per explanatory notes parts of such pumps are also covered under the same heading - Chapter 8906 of Customs Tariff covers Other Vessels, Including Warships and Lifeboats Other Than Rowing Boats. Even when the goods supplied by the applicants are meant as parts of vessels, they are to be classified under their respective chapter. i.e 8413. Whether the goods under consideration is covered under the entry No. 250 or 252 of Schedule I of Notification no. 01/2017-central GST (RATE) Dated 28.06.2017 and Notification No. vide G.O. (MS) No. 62 dated 29.06.2017? - HELD THAT - Forced Lubrication Pumps, Emergency Lube Oil Pumps, DG Lub Oil Transfer Pumps and Triple Screw Pumps with spares and parts are parts of vessels classifiable under 8906 and themselves classifiable under chapter 8413. Therefore, they are covered under entry at Sl.No. 252 of Schedule I of the Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 as amended at 2.5% CGST and at Sl.No. 252 of Schedule I of the Notification No. II(2)/CTR/532(d-4)/2017 vide G.O. (Ms) No. 62 dated 29.06.2017 as amended at 2.5% SGST and at SI. No 252 of Schedule I of Notification No. 1/2017-lntegrated Tax (Rate) dated 28.06.2017 as amended at 5% IGST.
Issues Involved:
1. Classification of Triple Screw Pumps and Parts thereof. 2. Applicability of GST rates for the said products when supplied to the Indian Navy. Issue-wise Detailed Analysis: 1. Classification of Triple Screw Pumps and Parts thereof: The applicant, M/s. Alekton Engineering Industries Private Limited, manufactures and supplies Triple Screw Pumps and Parts thereof, classifiable under Chapter Heading 8413 of the Customs Tariff Act 1975. These pumps are used for various industrial and marine applications, including pumping lubricating oils and other liquids. The applicant contends that when these pumps are supplied to the Indian Navy for use in vessels and warships, they should be classified as parts of vessels under Chapter Heading 8906. The Advance Ruling Authority examined the product catalog, purchase orders, and certificates provided by the applicant. It was noted that the pumps supplied to the Indian Navy are specifically designed for marine applications and meet stringent standards for noise, vibration, and shock levels. The pumps are used for lubrication and hydraulic operations on naval vessels, and the applicant has been supplying these products to various shipyards and defense establishments in India for over 40 years. The Authority referred to the explanatory notes of Chapter 8413, which cover pumps for liquids and their parts, and Chapter 8906, which covers other vessels, including warships. It was concluded that even if the pumps are used as parts of vessels, they should be classified under their respective heading, i.e., 8413. 2. Applicability of GST rates for the said products when supplied to the Indian Navy: The applicant sought clarification on whether the Triple Screw Pumps and Parts thereof, when supplied to the Indian Navy, attract a reduced GST rate of 5% IGST or 2.5% CGST + 2.5% SGST, as per Schedule I (Sl.No. 252) of Notification No. 1/2017-Integrated Tax (Rate) dated 28.06.2017. The Authority examined the relevant notifications and the scope of supply in the purchase orders. It was noted that the pumps supplied to the Indian Navy are classified as parts of vessels and warships. The explanatory notes to Section XVII of Chapter 89 state that parts and accessories of ships, even if identifiable as such, are classified in their respective chapters. Based on the detailed examination, the Authority ruled that the Triple Screw Pumps and Parts thereof, when supplied to the Indian Navy for commissioning in its vessels and warships, are covered under entry at Sl.No. 252 of Schedule I of the Notification No. 01/2017-C.T. (Rate) dated 28.06.2017, attracting a GST rate of 2.5% CGST + 2.5% SGST or 5% IGST. Ruling: 1. Forced Lubrication Pumps, Emergency Lube Oil Pumps, DG Lub Oil Transfer Pumps, and Triple Screw Pumps supplied to the Indian Navy for commissioning in its vessels and warships are classified as parts of "All types of Vessels & Warships." 2. These products are covered under entry at Sl.No. 252 of Schedule I of the Notification No. 01/2017-C.T. (Rate) dated 28.06.2017, attracting a GST rate of 2.5% CGST + 2.5% SGST or 5% IGST.
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