Concessional GST on marine engines for fishing vessels depends on proof of vessel registration and actual fishing use.

Marine engine supplies for fishing vessels are eligible for the concessional GST rate where the supply falls within the entry covering parts of goods of headings 8901, 8902 and allied headings. The Gujarat AAR notes that the supplier must conduct due diligence and verify a certificate of registry or licence for the fishing boat to establish the required nexus with a fishing vessel. If that nexus is not established, the concessional entry does not apply and the residuary GST rate of 28% governs. The rate is therefore determined case by case on the facts of the supply and the customer's status.

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Issues: Whether GST on marine engines supplied for fishing vessels is chargeable at 5% or 28%, and whether the applicable rate depends on the customer's registration and the use of the engine in a fishing vessel.

Analysis: The applicable entry in Notification No. 1/2017-Central Tax (Rate) and the CBIC circular clarify that parts of goods of headings 8901, 8902 and allied headings attract 5% GST. The ruling also notes that marine engines supplied for fishing vessels fall within this concessional treatment where the supplier conducts due diligence and ensures that the customer holds a certificate of registry or licence for the fishing boat. Where such nexus with a fishing vessel is not established, the concessional entry does not apply and the residuary rate governs.

Conclusion: Marine engine supplies are to be examined on a case-to-case basis. Where supplied to a registered fisherman for use in a fishing vessel, the GST rate is 5%. In all other cases, the GST rate is 28%.

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