Marine products for fishing vessels eligible for concessional 5% GST rate under specific entry

The Authority determined that the concessional 5% GST rate is applicable to the marine products if they are exclusively used for fishing vessels as per specific entries in the Central Tax (Rate) notification. The applicant's marine propellers and accessories may benefit from the lower tax rate under entry 252 of the notification if they are established to be parts of goods falling under specified headings.

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Issues involved:
1. Determination of the applicable tax rate on commodities like marine propellers, rudder set, stem tube set, propeller shaft, and couplings used for fishing or floating vessels.

Analysis:
1. The applicant, a Private Limited Company, sought an advance ruling to ascertain if the tax rate applicable to their products, used for fishing vessels, should be 5% as per specific entries in the Central Tax (Rate) notification.

2. The applicant manufactures marine propellers and accessories for the fishing sector, charging 18% GST presently. They argued that their products should be taxed at 5% under entry 252 of the notification, considering them as parts of fishing vessels under HSN Code 8902.

3. The Authority examined Chapter 89 of the tariff which covers fishing vessels, factory ships, and other related structures. It was noted that the applicant's products must be exclusively used for fishing vessels to qualify for the concessional tax rate under entry 252 of the notification.

4. The Authority ruled that the concessional 5% GST rate is applicable to the products, including marine propellers, rudder set, stern tube set, propeller shaft, and MS couplings, only if they are indeed used as parts of goods falling under specific headings mentioned in the notification.

By analyzing the facts and legal provisions, the Authority concluded that the applicant's products could benefit from the lower tax rate if they are established to be exclusively used for fishing vessels.

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