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TMI Blog2021 (7) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions. Accordingly, a reference hereinafter to the provisions of the CGST Act, Rules and the notifications issued there under shall include a reference to the corresponding provisions of the KSGST Act, Rules and the notifications issued there under. 3. The applicant requested for advance ruling on the following; 1. Applicability of GST rate of 5% on marine engines of heading 8407 and its spare parts without considering its general tax rate as per the entry of Schedule I, SI.No.252 of GST Act dated 28-06-2017, being the part of fishing vessel of heading 8902. 2. Whether GST is applicable for supply of materials and labour charges incurred during warranty period at free of cost on fishing vessels presented for repair works? 3. Applicability of GST rate of 5% on supply of materials and service charges in connection with the repairs and maintenance of fishing vessels of heading 8902 without considering its individual general tax rates as per the entry of Sch. No.I, Sl.No.252 of GST Act dtd.28-06-2017, being the part of fishing vessel of heading 8902. 4. The tax rate of puff insulated iceboxes produced by SIFFS and used by traditional fishermen at their fishing vessels for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e free supply of materials and labour incurred during repair works within warranty period to the fishing vessels supplied by them. 3. Whether GST rate of 5% can be applied for supply of materials and service for maintenance or repair works of fishing vessels of Heading 8902. 4. The rate of GST applicable for Puff insulated iceboxes manufactured by the applicant and used in fishing vessels for the purpose of reducing fish spoilage and maintaining good hygiene. 5. The rate of GST applicable to marine engines of Heading 8407 when it is supplied to defence department, patrol, flood relief and rescue operations. 7.2. Regarding the 1st issue it is an admitted fact that the marine engines 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 attracts GST at the rate of 28% as per entry at SI 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 is liable to GST a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks within warranty period to the fishing vessels supplied by the applicant. Warranty is a promise or guarantee made by a seller of the goods or a provider of services contemporaneously with and as a part of the contract of sale or service or both although collateral to the express object of the contract about the characteristics or quality of the goods or services or both. It can serve to help the purchaser or the recipient of goods or services or both to secure the conforming goods / services or provides remedy for breach of the agreement by the supplier. In the event of breach the law provides the injured party the right to damages or repairs or replacement of the goods. The consideration received for the original supply includes the consideration for promise to repair or replace. Hence separate consideration is not charged for warranty repairs I replacement. The supply of goods and services for warranty repairs I replacement is incidental to the original supply and the value of supply made earlier includes the charges for the warranty supply also. Therefore, the supply of goods or services or both during warranty period without consideration in discharge of the warranty obligati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d services supplied are shown separately, the goods and services would be liable to tax at the rates as applicable to such goods and services separately." 7.7. The applicant has neither produced any copy of the contract I agreement for supply of repair or maintenance service of fishing vessels nor any copy of the invoice issued for such supply. Therefore, it is not possible to ascertain the nature of the supply of repair or maintenance services rendered by the applicant as to whether it is a composite supply or it provides for the supply of spare parts and services (labour) as distinct and separately identifiable supplies. However, in view of the above clarification of the CBIC in cases where contract of supply of repair or maintenance specifies that the spare parts and services are to be separately charged and the value of such spare parts and services supplied are shown separately, the spare parts and the services shall attract GST respectively at the rates applicable to such spare parts and service as per the GST rate schedule as the supply of the spare parts and repair service are distinct and separately identifiable. In such cases the spare parts being supplied for use as par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the observations stated above, the following rulings are issued; RULING 1. Applicability of GST rate of 5% on marine engines of heading 8407 and its spare parts without considering its general tax rate as per the entry of Schedule I, SI.No.252 of GST Act dtd.28-06-2017, being the part of fishing vessel of heading 8902. The marine engine and its spare parts supplied for use in vessels falling under Customs Tariff Heading 8902 shall attract GST at the rate of 5% [2.5%-CGST + 2.5% SGST] as per entry at SI 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 fishing vessels as stated above GST at the rate applicable under the respective Customs Tariff Headings in which they are classified will apply. 2. Whether GST is applicable for supply of materials and labour charges incurred during warranty period at free of cost on fishing vessels presented for repair works? The supply of goods or services or both during warranty period without consideration in discharge of the warranty obligation is not liable to GST. However, if any additional consideration is received in respect of such supplies of good ..... X X X X Extracts X X X X X X X X Extracts X X X X
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