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Outboard Motors for Unregistered Fishermen Attract 5% GST When Used Specifically for Fishing Vessels The AAR determined that Outboard Motors supplied to unregistered fishermen for fishing vessels attract 5% GST (2.5% CGST and 2.5% SGST) when used ...
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Outboard Motors for Unregistered Fishermen Attract 5% GST When Used Specifically for Fishing Vessels
The AAR determined that Outboard Motors supplied to unregistered fishermen for fishing vessels attract 5% GST (2.5% CGST and 2.5% SGST) when used specifically for fishing vessels under Heading 8902. The Authority based this on CBIC circular clarifications regarding marine engines and spare parts for fishing vessels. However, if these motors are used for purposes other than fishing vessels, GST would apply according to the relevant Customs Tariff Heading classification (Heading 8407). The ruling applies specifically to Outboard Motors and their spare parts when supplied for use in fishing vessels.
Issues: Rate of GST on supply of Outboard Motors to unregistered fishermen and HSN Code classification.
Analysis: The applicant, a Partnership Firm engaged in retail and wholesale supply of marine equipment, sought an advance ruling on the GST rate and HSN code for Outboard Motors supplied to unregistered fishermen. The admissibility of the application was confirmed under Section 97(2)(a)(e) of the CGST/KGST Act 2017. The applicant clarified that they import Outboard Motors at 28% and sell them to fishermen at 5% GST. They also provided examples of spare parts classifications and referenced relevant circulars and AAR rulings.
During the personal hearing, the applicant's Chartered Accountant reiterated the contentions. The Authority noted the similarity between CGST and SGST Acts and considered all submissions and facts. It was established that Outboard Motors fall under Customs Tariff Heading 8407 and Fishing vessels under Heading 8902, attracting 5% GST. The applicant supplies marine engines and spare parts as parts of fishing vessels, subject to 2.5% CGST as per Schedule I of Notification No.01/2017.
The CBIC circular clarified that marine engines and spare parts for fishing vessels attract 5% GST. If used for other purposes, GST applies as per the respective Customs Tariff Headings. Consequently, the ruling stated that Outboard Motors and spare parts supplied for fishing vessels attract 5% GST. If used differently, GST applies based on the relevant Customs Tariff classification.
In conclusion, the ruling determined that Outboard Motors and spare parts supplied for fishing vessels are subject to 5% GST, while other uses are taxed based on the respective Customs Tariff classification.
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