Marine paint is not a ship part where it serves only a protective function and remains independently usable.

Marine paint supplied for ships, including anti-fouling paint, is not a "part" of goods of heading 8907 under Sr. No. 252 of Schedule I to Notification No. 1/2017-Central Tax (Rate). Applying the ordinary meaning of "parts" because GST law does not define the term, the AAAR held that a part must be integral and essential to completion of the whole article; a product that merely protects, improves durability, or facilitates use does not qualify. Marine paint has an independent identity and independent uses, and a ship can sail without it. Compliance with anti-fouling requirements under the Merchant Shipping Act, 1958 did not change its classification.

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Issues: Whether marine paints supplied for ships are classifiable as "parts" of goods of heading 8907 under Sr. No. 252 of Schedule I to Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017.

Analysis: The impugned goods were accepted to be classifiable under headings 3208 and 3209, but the claim was that they should also fall within entry 252 as parts of ships. The expression "parts" was not defined in the GST law, so its ordinary meaning was applied. On that test, a part must be something integral and essential to the completion of the whole article and not merely something that improves durability, convenience, or performance. Marine paint, including anti-fouling paint, has an independent identity and independent uses; it may protect a ship and extend its life, but the ship can still sail without it. The requirement under the Merchant Shipping Act, 1958 that ships comply with anti-fouling systems does not convert paint into a component part of the ship. The authorities relied upon by the appellant concerned marketability under excise or sales tax law and did not justify treating paint as a part of the ship.

Conclusion: Marine paint is not a component part of a ship and does not fall under Sr. No. 252 of Schedule I to Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017.

Ratio Decidendi: A product having an independent existence and merely serving a protective or facilitating function does not become a "part" of the main goods unless it is integral to the completion of the whole article.

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