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of <h1>Tax Ruling: Fishing Vessel Parts Taxed at 5% SGST/CGST vs. 18% for Other Uses</h1> <h3>In Re : Sri. Dharsak. V.P. And Saraswathi Metal Industries</h3> In Re : Sri. Dharsak. V.P. And Saraswathi Metal Industries - 2018 (13) G.S.T.L. 426 (A. A. R. - GST), [2018] 2 GSTL (AAR) 52 (AAR) Issues:Rate of tax applicable to marine propellers, rudder set, stern tube set, propeller shaft, and M.S. Shaft for couplings used in fishing/floating vessels.Analysis:The applicant sought an Advance Ruling on the tax rate applicable to various commodities used in fishing/floating vessels. The applicant argued that since the products are primarily used for fishing and allied activities, they should be taxed at 5% under specific entries in the Central Notification 1/17. The Authority examined the application and decided to admit it based on the contentions raised by the applicant during the personal hearing.Regarding the tax rate, the HSN specified in the application indicated an 18% tax rate for the mentioned commodities. However, it was highlighted that parts of fishing vessels and other related vessels are taxed at 5% under entry 252 of the 1st schedule of SRO 360/2017. This entry encompasses goods like fishing vessels and factory ships, indicating that the tax rate classification depends on the intended use of the commodities.The Authority determined that commodities like marine propellers, rudder set, stern tube set, propeller shaft, and M.S. Shaft for couplings used solely for fishing/floating vessels should be taxed at 5%. In contrast, if these commodities are utilized for other purposes, the tax rate applicable would be 18%. Therefore, the ruling clarified that these commodities, when part of fishing/floating vessels, fall under Entry 252 of the relevant notifications, making them subject to a 5% tax rate split between SGST and CGST.
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