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2022 (10) TMI 857 - AAR - GSTClassification and applicable rate of GST - outboard motors pertaining to HS Code 8407 and its spare parts as per Entry in Schedule I, Sl. No. 252 of GST Act, 2017 dated 28.06.2017 - GST rate of 28% shown in Schedule IV Sl. No.114 is applicable for sales made by the applicant or not - applicability of clarification issued vide Circular No.52/26/2018-GST - HELD THAT - The Outboard motors imported by the applicant are classified under Customs Tariff Heading 8407 21 00 - Outboard motors - Marine Propulsion engines - Spark-ignition reciprocating or rotary internal combustion piston engines and attract GST at the rate of 28% as per entry at Sl. No. 114 of Schedule IV of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. Fishing vessels, factory ships, and other vessels for processing or preserving fishery products fall under Customs Tariff Heading 8902 and are liable to GST at the rate of 5% as per entry at Sl. No. 247 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. However, as per entry in Sl. No. 252 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907 falling under any chapter of the Customs Tariff attracts GST at the rate of 5 %. Therefore, if the Outboard motors are supplied for use as part of a fishing vessel falling under Customs Tariff Heading 8902, then OBM as part of the fishing vessel will only attract GST at the rate of 5% as per the entry at Sl. No. 252 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. Therefore, if the Outboard motors are supplied for use as part of a fishing vessel falling under Customs Tariff Heading 8902, then OBM as part of the fishing vessel will only attract GST 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. If it is supplied for use other than as parts of goods of headings 8901, 8902, 8904, 8905, 8906 and 8907, GST at the rate applicable under the respective Customs Tariff Headings in which they are classified will apply.
Issues Involved:
1. Applicability of GST rate of 5% for outboard motors under HS Code 8407 and its spare parts. 2. Applicability of clarification issued vide Circular No.52/26/2018-GST (Point 10.1). Detailed Analysis: Issue 1: Applicability of GST rate of 5% for outboard motors under HS Code 8407 and its spare parts The applicant, registered in Kerala, imports and supplies Yamaha Out Board Motors (OBMs) and related parts to various customers in India. They sought an advance ruling on whether the GST rate of 5% applies to OBMs under HS Code 8407 and its spare parts, as per Entry in Schedule I, Sl. No. 252 of the GST Act, 2017 dated 28.06.2017, and if the GST rate of 28% shown in Schedule IV Sl. No. 114 is not applicable. The applicant argued that OBMs, classified under HSN Code 8407 21 00, are parts of marine vessels falling under Tariff Item nos. 8901, 8902, 8904, and 8906, and thus should attract a GST rate of 5%. They referenced Notification No.01/2017-CT(R) dated 28-06-2017 and Circular No.52/26/2018-GST dated 09.08.2018, which clarified that marine engines for fishing vessels falling under Tariff item 8408 10 93 attract a GST rate of 5%. The jurisdictional officer contended that OBMs under HSN Code 8407 21 00 attract a GST rate of 28%. However, upon examination, it was found that parts of goods of headings 8901, 8902, 8904, 8905, 8906, and 8907 falling under any chapter attract GST at the rate of 5% as per entry in Sl. No. 252 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. Therefore, if OBMs are supplied for use as part of a fishing vessel under Customs Tariff Heading 8902, they will attract GST at the rate of 5%. Issue 2: Applicability of clarification issued vide Circular No.52/26/2018-GST (Point 10.1) The applicant also sought clarification on whether Circular No.52/26/2018-GST (Point 10.1) is applicable. The circular clarified that marine engines for fishing vessels falling under Tariff item 8408 10 93 attract a GST rate of 5%. This clarification was found to be applicable to the applicant's case, confirming that parts of goods of heading 8902 falling under any chapter attract a GST rate of 5%. Rulings: 1. The Out Board Motors and its spare parts supplied for use in vessels under Customs Tariff Heading 8902 shall attract GST at the rate of 5% [2.5% CGST + 2.5% SGST] as per entry at Sl. No. 252 of Schedule I of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. If supplied for use other than as parts of goods of headings 8901, 8902, 8904, 8905, 8906, and 8907, the applicable GST rate under the respective Customs Tariff Headings will apply. 2. The clarification issued vide Circular No.52/26/2018-GST (Point 10.1) is applicable in the instant case.
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