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TMI Blog2022 (10) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... in fishing activities. The Combined Wire Rope having HSC code 7312 and specification 14mm diameter and construction 6xl9SCF supplied to those Customers for its usage primarily and solely as a part of Fishing Vessels having HSN code 8902. 4. The applicant has submitted that Combination Wire Rope with steel core, stainless steel (red tracer yam) PP-coated combination ropes are used by in trawl fishing all over the world. These ropes also are known as "Taifun Ropes". 5. The applicant has submitted that the goods of any chapter heading used as a parts of Fishing Vessels having chapter heading 8902 are eligible for 2.5% CGST as per Sr.No.252 of Schedule -I of Notification No. 1/2017-Central Tax (Rate).2.5% SGST vide corresponding Notification issued by Gujarat State Government and 5% IGST Notification No.1/2017-ITR. The said serial number is reproduced as under. Schedule-I Sr.No. Chapter/ Heading/ Subheading/ Tariff item Description of goods Rate 252 Any Chapter Parts of the Goods of heading 8901, 8902, 8904. 8905, 8906, 8907 2.5% 6. The applicant has submitted the Photos of applicant product as follows: The typical Scanned Image of Combined Wire Rope is as under: For bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.1 Further, Sr.No.247 of Schedule-1 of the Notification 1/2017-Central Tax (Rate) prescribes that the "Fishing Vessels; factory ships and other vessels for processing or preserving fishery products" classifiable under Chapter Heading 8902 are attracting 5% [2.5% CGST+ 2.5% SGST] and Sr.No.252 of Schedule-I of the said notification prescribes that "goods of any chapter" if used as ''parts of the goods of heading 8902" is also attracting 5% [2.5% CGST+ 2.5%SGST]. Rope is basic parts of Fishing Boat. 10. The applicant submit that there is difference between Vessels and Fishing Vessels. As the very name suggests. Fishing Boats/Vessels has a specific purpose i.e. of Fishing for which usage of. Fishing net is must. The fishing net is tied and hooked with Fishing Vessels with the help of Combined Wire Rope. 10.1 The basic parts of Fishing Boat are available for reference is downloaded from https://www.galatiyachts.com/yachting-news/parts-of-a-fishing-boat-valhalla-boatworks- center-console/ is scanned and pasted as under. The Basics | Parts of a Fishing Boat You may already know the basic terminology of a boat and if so, you are already one step ahead Let s go over some of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract GST @5%, as per S. No. 247 of Schedule-1 of the notification No. 1/2017-Central Tax (rate), dated 28-6-2017. Further, parts of goods of heading 8902. falling under any chapter also attracts GST rate of 5%, vide S. No. 252 of Schedule I of the said notification. The Marine engine for fishing vessels falling under Tariff item 8408 1093 of the Customs Tariff Act, 1975 would attract a GST rate of 5% by virtue of S.No. 252 of Schedule-1 of the notification No. 1/2017-Central Tax (Rate), dated 28-6-2017. 10.2 Therefore, it is clarified that the supplies of marine engine for fishing vessels (being a part of the fishing vessels, falling under tariff item 8408 10 93 attracts 5% GST. 10.4 Though the aforesaid circular is clarification for "Marine Engine" used for Fishing Vessels, the ratio of the said circular is applicable in the applicant's case as the Wire Rope supplied by the applicant is used as part of Fishing Vessels. 11. The applicant has relied upon the judgment of The Hon'ble Supreme Court of India wherein it have laid down the test to ascertain what is parts in case of Saraswati Sugar-Mills v. Commissioner of Central Excise Civil Appeal No. 5295 of 2003, decided o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onents to various machinery units to protect the rubber-coated tyre fabric from atmospheric moisture and dust. This Court held that the PPLF was not a component of the machine itself. It was not a constituent part. It was used as a Liner Fabric not only in tyre production but also in similar other industrial processes 12. The applicant has submitted that the test laid down by the Hon'ble Supreme court to determine what is component or part of an article in the aforesaid case is clearly applicable in the instant case. The Combined Wire Rope which constitutes its essential nature without which Fishing Vessels cannot function for Fishing activities in other words without which Fishing Vessels cannot be manufactured and is an integral part of the Fishing Vessels. 13. The applicant has placed reliance on the various Ruling delivered by Authority of Advance Ruling across the country where in it was categorically held that goods of any chapter heading when used as a parts of heading 8901, 8902. 8904. 8905. 8906, 8907 are eligible for 5% Rate of GST in terms of Sr.No.252 ibid. The applicant would like to rely on following Rulings.- (i) In the case of Excide Industries Ltd. the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t/SS road. Gun metal bush/bearing, Stuffing box. Brass Tube/SS Tube, Rudder Shaft and Blade, Sea Cork/Water Strainer, GM Gate Valve, MS Pipe, Propeller Nut/GM Nut. Coupling, SS Rods Square, SS Flat, GM Gland and Ring and MS Plate used as parts of fishing/floating vessels come under the HSN Code 8902 and are taxable @ 5% (2.5% CGST + 2.5% SGST) under Serial No. 252 of First Schedule of the Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 (SRO. No. 360/2017, dated 30-6-2017)." Here it is pertinent to note that the goods for which ruling was sought for does not having exclusive use in the Fishing Vessels, however when it use as a part of warships, it was ruled by he Authority that the applicability ofSr.No.252 of the notification ibid comes in to play. (iv) In the case of Techno Tradings and Services (P) Ltd reported at 2019 (24) G.S.T.L. 105 (A.A.R. - GST) following questions were before the Authority for Advance Ruling, Kerala were raised. Applicant is an authorized dealer of Marine Engines and Marine Gear Box used for fishing boats. The question raised by the applicant and Rulings passed by the authority in their order No. KER/34/2019. dated 1-3-2019 as under.- (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is used for Fishing Vessels it will attract GST @ 5%, however if it is used elsewhere it will attract GST @ of 28% (v) In the case of DHARSAK. V.P. reported at 2018 (13) G.S.T.L. 426 (A.A.R. - GST) where in the Authority for Advance Ruling. Kerala has held that:- Parts of Fishing/Floating Vessels - Classification and taxability under GST - Advance Ruling thereon - Various parts such as marine propellers, rudder set, stern tube set, propeller shall and M.S. Shaft for couplings are supplied by applicant specific for use in said vessels and cannot be called general purpose parts - Hence, these are covered under Entry No. 252 of Schedule I of Notification No. 1/2018-C.T. (Rate), and taxable @ 5% - Had these parts been used for some other purpose, these would have been taxable @ 18% as per description - Ruled accordingly - Section 9 of Central Goods and Services Tax Act, 2017. [paras 4, 5, 6, 8] In this case authority observed that goods for which ruling was sought for, it is categorically ruled that if the said goods is used for Fishing Vessels it will attract GST @ 5%, however if it is used elsewhere it will attract GST @ of 18% 14. The applicant has submitted that the trajecto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Government, on the recommendations of the Council, hereby notifies the rate of the central tax of- i. 2.5 per cent, in respect of goods specified in Schedule I, ii.------------- iii. -------------- iv. -------------- v. -------------- vi. -------------- appended to this notification (hereinafter referred to as the said Schedules), that shall be levied on intra-State supplies of goods, the description of which is specified in the corresponding entry in column (3) of the said Schedules, falling under the tariff item, sub-heading, heading or Chapter, as the case may be, as specified in the corresponding entry in column (2) of the said Schedules. Schedule I - 2.5% S.No. Chapter / Heading / Sub-heading / Tariff item Description of Goods 1 2 3 252. Any chapter Parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907 From the above it is clear that on supply of parts of goods falling under HSN 8902 shall attract CGST @2.5%. HSN Code 8902 is for Fishing vessels; factory ships and other vessels for processing or preserving fishery products (excluding fishing boats for sport). Further, it is a fact that the Combine Wire Ropes are general uses items, having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the GGST Act. 21. We find that the applicant is supplying the Combined Wire Ropes mainly to such customers having Fishing Vessels/Boat and are engaged in Fishing activities. The main issue here is to decide whether the Combined Wire Ropes is a part of fishing vessel or otherwise. 22. We find that the applicant is Authorized wholesale dealer for supply of Combined Wire Rope manufactured by M/s Kadambari Steel Wire Rope Pvt. Ltd and M/s Usha Martin India Limited. We have referred the Manual for Wire Ropes DOC No. CMD-III/l 855/1 MANUAL issued by Bureau of Indian Standards wherein the technical specifications and usage of Wire Ropes have been given and are reproduced for the ready reference as under:- IS 1855: 2003 Stranded Steel Wire Ropes For Winding and man-riding Haulages Mines. IS 1856 : 2005 Steel Wire ropes for Haulage purposes IS 2266: 2002 Steel Wire ropes for General Engineering Purposes IS 2365: 1977 Specification for Steel wire Suspension ropes for lifts, escalators and hoists IS 2581: 2002 Round Strand galvanized steel wire ropes for shipping purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of another article, the correct test would be to look both at the article which is said to be component part and the completed article and then come to a conclusion whether the first article is a component part of the whole or not. One must first look at the article itself and consider what its uses are and whether its only use or its primary or ordinary use is as the component part of another article. There cannot possibly be any serious dispute that in common parlance, components are items or parts which are used in the manufacture of the final product and without which, final product cannot be conceived of. 13. The meaning of the expression 'component' in common parlance is that 'component part of an article is an integral part necessary to the constitution of the whole article and without it, the article will not be complete'. The above judgement of Hon'ble Supreme Court of India has clearly defined what the Parts are. The Apex Court has held that Parts are used in the manufacture of the final product/article and is an integral part of the final product and it is must to complete the whole article without it the final product/article will not be complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther vessels for processing or preserving fishery products : 8902 00 10 --- Trawlers and other fishing vessels 8902 00 90 --- Other 26.1 The applicant has argued that Combine Wire Rope is a part of fishing vessel and therefore is eligible for the GST rate @ 5 % under entry at Sr. No. 252 of the Not. No. 1/2017-CT (Rate) dated 28-6-2017. We have already discussed in the above paras that Combine Wire Rope is not a part of fishing vessel but it is used to tie the fishing net with the vessel. Therefore, applicant argument does not hold good and Combine Wire Rope is not eligible for the GST Tax @ 5% under entry at Sr. No. 252 of Not. No. 1/2017-CT (Rate) dated 28-6-2017. 27. The applicant has placed reliance on the Circular No. 52/26/2018-GST, dated 9-82018 issued from F. No. 354/255/2018-TRU (Part-2), issued by Central Board of Indirect Taxes & Customs, New' Delhi wherein at para 10.1 and 10.2 it is clarified that, 'the supplies of marine engine fishing vessel (being a part of the fishing vessel), falling under tariff item 8408 10 93 attracts 5% GST'. The said clarification is issued with regard to marine engine which is integral part of fishing vessel as such without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/2017-Integrated Tax (Rale), dated 28-6-2017 and hence is taxable @5% GST?" (ii) The Authority for Advance Ruling, Karnataka in the case of SR Propellers Pvt. Ltd in their order KAR ADRG 78/2019. dated 24-9-2019 reported at 2019 (31) G.S.T.L. 382 (A.A.R. - GST) has ruled that "The concessional rate of 5% GST in terms of Entry Number 252 of Schedule I to the Notification No. 01/2017-Central Tax (Rate), dated 28-6-2017 is applicable to the products marine propeller, rudder set, stern tube set. propeller shaft and MS couplings subject to the condition that the said parts form parts of goods falling under 8901, 8902, 8904, 8905, 8906 & 8907." (iii) The authority for Advance Ruling Kerala in the case of M/s Gurudev Metal Industries in their order Advance Ruling No. KER/50/2019, dated 15-7-21 reported at 2019 (28) G.S.T.L. 191 (A.A.R. - GST) has ruled that "Propeller, shaft/SS road, Gun metal bush/bearing, Stuffing box, Brass Tube/SS Tube, Rudder Shafts and Blade, sea Cork/Water Strainer, GM Gate Valve. MS Pipe. Propeller Nut/GM Nut. Coupling. SS Rods & Square, SS Flat, GM Gland and Ring and MS Plate used as parts of fishing/boating vessels come under the HSN Code 8902 and are taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied for use in vessels/goods falling under Headings 8901, 8902, 8904, 8905, 8906, 8907 will be deemed to be parts of such goods and thereby taxable @ 5% GST per Serial No. 252 of Schedule I of the Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017. If it is used for some other purpose, the applicable tax rate would be as per their respective TSH 8408 and 8483 at the rate of 28% GST as per SL Nos. 115 and 135 of the said notification. (v) In the case of DHARSAK. V.P. reported al 2018 (13) G.S.T.L. 426 (A.A.R- GST) where in the Authority for Advance Ruling, Kerala has held that; Parts of Fishing/Floating Vessels - Classification and taxability under GST - Advance Ruling thereon - Various parts such as marine propellers, rudder set, stern tube set, propeller shaft and M.S. Shaft for couplings are supplied by applicant specific for use in said Vessels and cannot be called general purpose parts - Hence, these are covered under Entry No. 252 of Schedule I of Notification No. 1/2018-C. T. (Rate), and taxable @ 5% - Had these parts been used for some other purpose, these would have been taxable @ 18% as per description - Ruled accordingly - Section 9 of Central Goods and Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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