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TMI Blog2021 (9) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... ondences with the proposed principal suppliers with whom they intend to enter into transactions or agreements/Purchase orders for further supply. In this situation, without the specifics of the proposed supply, substantiated with the material facts, this authority is constrained to rule on the applicability of the said entry to the proposed transactions, based on the clarification in the Circulars and the rulings extended by the Advance Ruling authorities of Kerala, Maharashtra, etc. Therefore, without material evidence for the proposed supply, no ruling is extended on the clarifications sought by the applicant. - TN/32/ARA/2021 - - - Dated:- 17-8-2021 - THIRU SENTHILVELAVAN B., I.R.S AND TMT T. PADMAVATHI, MEMBER, Note: Any appeal against the Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that they are collecting Marine Fishers Identity Card issued by the Government of India (Ministry of Agriculture) while supplying to the fishing boats and vessels as a proof for supplying to the fishing boats. 2.2 On interpretation of law, they have stated that as per the circular No.52/26/2018-GST the marine engine for fishing vessels 8408 of the Customs Tariff Act, 1975 would attract a GST rate of 5% by virtue of S.No.252 of Schedule I of the notification No. 01/2017-Central Tax (rate) dated 28.06.2017; they are ready to furnish the relevant documents of proof of supply of goods is for fishing boats and vessels only; As per Notification No. 01/2017-Central Tax (rate) dated 28.06.2017 it is clearly stated that Marine Engines supplied to Fishing Boats would attract 5% GST even though it is Higher taxable rate. ; Advance Ruling KER/34/2019 dated 01.03.2019 issued in the case of M/s. Techno Tradings and Services (P) ltd, wherein it was held that i. The Diesel Engines supplied for use in goods falling under heading 8901, 8902, 8904, 8905, 8906, 8907 will be deemed to be parts of vessels / goods falling under the above headings and thereby taxable @ 5% GST as per Si No.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity in the pre-GST regime and also that they don't have any purchase orders at present. They were asked to submit list of products they intend to supply and their financial statements which they agreed to. 3.2 The applicant on 16.07.2021 furnished copy of the Advance Ruling issued in the case of South Indian Federation of Fisherman Societies, Thiruvanthapuram by AAR, Kerala. Further vide their letter dated 22.07.2021 they submitted that they are the distributor for 'marine engines and equipment' and focus on providing complete sales and service support to customers under various application segments including commercial fishing boats, rescue boats, work/passenger boats, etc; Their key potential customers are commercial fishermen, work boat customers including pilot launch, passenger boats, self-propelled barges, etc apart from government organizations like NDRF, Civil Defence Kolkata, ASDMA involved in flood and rescue operations, patrol boats like Indian Navy, Indian Army, BSF, Indian Coast Guard, etc.; they provide complete sales and service support to all their customers and have multiple service center and trained manpower across the coastline for the same.; The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Systems Ice Slurry Machines (Snowkey brand from Fujian Snowman), falling under HSN 8418 - primarily used for preserving the fish and installed on fishing vessels under HSN 8902. Sea Water Pumps (from JMP Corporation, Korea) falling under HSN 8413, but primarily used for fishing boats vessels with HSN: 8901, 8902, 8904, 8905, 8906 8907. Propellers for Marine Outboard Motors and Sterndrives under HSN 8487 (from Solas Propellers Taiwan), primarily used for primarily used for fishing boats vessels under 8902, other than 8901, 8904, 8906 8907. Marine Spare Parts Accessories, including Ultraflex brand of Control Steering Systems from Italy under HSN 8409, but primarily used for commercial work, fishing and patrol vessels and alike with HSN: 8901, 8902, 8904, 8905, 8906 8907. The applicant has stated that they have sought the advance ruling for the above mentioned products/ items and are seeking clarification whether these items can be invoiced under 5% GST when used as Parts of heading of 8901, 8902, 8904, 8905, 8906 and 8907 attracting 5% IGST or 2.5% CGST + 2.5% SGST/UTGST as per as per Schedule I (Sr. No. 252) of Notification No. 01/2017 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f engines or spare parts to Indian Government and defense and paramilitary organizations, including Indian Navy, Indian Army, Inland Waterways Authority of India Ltd. (IWAI), etc. In the past, to ensure prompt service support is provided to mission critical applications of defense organizations, their Hyderabad office posted trained service personnel in some of the critical locations like Mumbai, but deputed them from Hyderabad to Leh or Goa where the ships will anchor before continuing the voyage. In mid-2019, the company decided diversity and focus on retail business with new products which are more cost-effective and affordable to customers, mainly in the commercial fishing and passenger boat applications by setting up an office in Chennai and a separate GSTIN was obtained in March 2020 after which they started discussing with various principals to finalize the distribution agreement. However, due to COVID and related lockdown, their business got affected and the agreements got delayed and are still under discussion. They expect to be concluded shortly and commence business from Chennai. Further, at the moment the applicant is not representing any major vendor from the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal authorities. The applicant has applied for ruling on the following questions: - 1. Whether the supply of goods under HSN Code 8407 while principal supply is for fishing boats and vessels applying 5% GST rate is correct or not. 2. As per the earlier Advance Rulings issued in various states and circular issued from Ministry of Finance (Revenue Department) it clearly states that the GST liability for HSN 8408 is only 5% when it is supplied to fishing boats and vessels even though it is in higher taxable rate of 28% GST under the GST Schedule. Why it cannot adopt the same for HSN 8407 marine engines. 3. Goods of supply under HSN code 8409, 8483, 8902, 8487, 8501, 8502, 8415, 8418, 8413 which is also supplied to fishing boats and vessels mainly. Whether it can be adopted as per the circular. 7.1 From the submissions, it is seen that they have not carried on this activity in pre GST regime and also they don't have any purchase orders at present. Their Hyderabad Office was undertaking sales and Service Support of these engines and the applicant office at Chennai was set up only in March 2020. They have stated that presently, they are not representing any major ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 95(a) of the GST Act, Advance Ruling can be sought in respect of the proposed supplies and as per Section 103 of the Act, the ruling is applicable to only the person seeking the ruling based on the material facts of the transactions. In the case at hand, the ruling is sought on the applicability of effective rate of the products said to be 'proposed to supply' as parts of fishing boats and vessels falling under CTH 8901, 8902,8904,8905, 8906 8907. The clarification sought is whether the rate prescribed under sl.no. 252 of Annexure-I of Notification No. 01/2017-C.T. (Rate) dated 28.06.2017 as amended. The said entry is as below: SI.No Chapter/Heading/Sub-Heading/Tariff item Description of Goods Rate 252 Any chapter Parts of goods of headings 8901,8902,8904,8905,8906,8907 2.5% The said entry is applicable to goods falling under any chapter, provided the same is Parts' of goods of heading 8901- Cruise Ships, Excursion Boats, Ferry-Boats, Cargo Ships, Barges And Similar Vessels For The Tran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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