Concessional GST on marine engines applies only when supplied for qualifying vessels and proven end use is documented.

Marine engines supplied for qualifying vessels under heading 8906 attracted GST at 5% under Sl. No. 252 only when the end use and linkage to the vessel were proved by supporting documents. On the documents produced, engines supplied for defence and naval vessels used for patrolling, flood relief and rescue operations were held eligible for the concessional rate, but spare parts of the marine engines were held outside the entry. The fishing-vessel question was not answered because the applicant did not furnish adequate evidence to establish supply for fishing vessels.

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Issues: (i) Whether marine engines supplied for fishing vessels qualify for GST at 5% under Sl. No. 252 of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017. (ii) Whether marine engines supplied for vessels used by the defence department and naval base for patrolling, flood relief and rescue operations qualify for GST at 5%, and whether spare parts of such marine engines also qualify for the same rate.

Issue (i): Whether marine engines supplied for fishing vessels qualify for GST at 5% under Sl. No. 252 of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017.

Analysis: The concessional rate under Sl. No. 252 applies to parts of goods of headings 8901, 8902, 8904, 8905, 8906 and 8907, and the circular relied upon clarifies that marine engines attract 5% only when supplied as part of fishing vessels. The benefit therefore depends on the end use being established through supporting documents. In the present case, the applicant did not furnish adequate documentary evidence to prove that the engines were supplied for fishing vessels.

Conclusion: No ruling was granted on this issue for want of substantiating documents.

Issue (ii): Whether marine engines supplied for vessels used by the defence department and naval base for patrolling, flood relief and rescue operations qualify for GST at 5%, and whether spare parts of such marine engines also qualify for the same rate.

Analysis: The vessels used for patrolling, relief and rescue fall within heading 8906, and parts of goods of that heading are covered by Sl. No. 252. On the documents produced, the supply of marine engines to the defence establishment and naval base was established, so the concessional rate was held available when the engines were fitted in such qualifying vessels. However, the entry covers parts of the specified vessels, not spare parts of marine engines, and no supporting documents for spare parts were furnished.

Conclusion: GST at 5% was held applicable to the marine engines supplied for qualifying vessels under heading 8906, but the same rate was held not available to spare parts of the marine engines.

Final Conclusion: The ruling granted concessional treatment only to marine engines supplied for eligible vessels used by the defence establishment and denied the concession for spare parts, while declining to answer the fishing-vessel question for lack of evidence.

Ratio Decidendi: Concessional GST under the relevant entry for vessel parts is available only when the specified end use and linkage to the qualifying vessel are proved by supporting evidence, and the entry does not extend to spare parts of the marine engines themselves.

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