GST Applicability on Supplies to Specific Vessels under Special Warehouse License

The Authority for Advance Ruling in Andhra Pradesh determined that the applicant, holding a Special Warehouse License, is not exempt from GST on outward supplies to specific vessels, including ocean-going merchant vessels, Indian Naval Ships, and Indian Coast Guard Ships. The supplies were considered inter-State transactions subject to GST as they fell within the customs area. While some supplies could potentially qualify as exports, the applicant was advised to collect GST from customers depending on the nature of the supplies and chosen export method. The ruling clarified the tax liability and collection obligations of the applicant for their transactions involving warehoused goods.

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Issues:
1. Exemption from GST on outward supplies to specific vessels
2. Liability for GST on outward supplies and collection from recipients

Analysis:

Issue 1: Exemption from GST on outward supplies to specific vessels
The applicant, holding a Special Warehouse License under the Customs Act, sought an Advance Ruling on whether they are exempt from GST on supplies to ocean-going merchant vessels, Indian Naval Ships, and Indian Coast Guard Ships. The Jurisdictional Officer confirmed no pending proceedings or final orders against the applicant. The applicant presented documentary evidence during a personal hearing, including licenses, certificates, and supply details for the vessels in question. The Authority examined relevant statutory provisions, defining customs area, export of goods, and exempt supply under GST laws. It was determined that the goods received by the applicant fall within the customs area, making the supplies inter-State transactions subject to GST. The supplies were not considered exempt as per GST definitions.

Issue 2: Liability for GST on outward supplies and collection from recipients
The Authority noted that some supplies by the applicant could potentially qualify as exports, constituting zero-rated supplies. However, the present application did not address this aspect. Referring to a Customs Circular, it was clarified that transactions involving warehoused goods between the importer and others are considered supplies taxable under the CGST Act and IGST Act. Such transactions, including sales or transfers, are subject to IGST before goods cross the Indian customs frontiers. The ruling stated that the applicant is not exempt from GST on outward supplies to the specified vessels and can collect GST from customers, depending on whether the supplies qualify as exports and the manner of export chosen.

This comprehensive analysis of the judgment from the Authority for Advance Ruling - Andhra Pradesh addresses the issues raised by the applicant regarding GST implications on their supplies to specific vessels, providing a detailed examination of relevant provisions and considerations for tax liability and collection.

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