TaxTMI 
TaxTMI 
TaxTMI 
2021 (9) TMI 909
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....same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, made by the applicant are as under:- 2.1 M/s. Exide Industries Limited, the applicant is a registered person under GST Laws in the State of Maharashtra. Applicant manufactures and supplies of lead acid storage batteries falling under Chapter 85 of the First Schedule to the Customs Tariff Act 1975. 2.2 Applicant is seeking an advance ruling on the rate of GST leviable on supply of batteries for use in warships, specifically submarines, by Indian Navy. Applicant also seeks applicability of Entry No. 252 of Notification No. 01/2017-Integrated Tax (Rate) for supply of batteries for use in warships, specifically submarines, to Indian Navy. 2.3 Applicant has been awarded orders by the Ministry of Defense, Government of India, requiring the Applicant to supply specific types ....
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....on; floating docks; floating or submersible drilling or production platforms 250. 8906 Other vessels, including warships and lifeboats other than rowing boats 251. 8907 Other floating structures (for example, rafts, tanks, coffer-dams, landing-stages, buoys and beacons) 2.9 Chapter Heading 8903 relating to Cruise ships, are kept out of the above list which clearly shows the intention of the legislature to tax it as a luxury item. The grounds on which the Applicants feel that the subject supplies attract 5% GST are enumerated hereunder: Grounds to support the contention that the said supply is subject to tax @ 5% under Entry No. 252 of Schedule I to Notification No. 01/2017 Integrated Tax (Rate) dated 28.06.2017 A) THE SAID ENTRY COVERS ANY PRODUCT SUPPLIED WHICH FORMS PART OF GOODS COVERED UNDER TARIFF HEADING 8901, 8902, 8904, 8905, 8906, 8907 A.1. Applicant submits that the Entry 252 of Schedule 1 to Notification No. 01/2017 I.T.(Rate) dated 28.06.2017 (hereinafter referred to as the "rate notification") covers all goods which form a part of goods falling under tariff Heading 8901, 8902, 8904, 8905,8906 and 8907. From a bare reading of the said entry at S. No. 252, ....
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....tion was similarly provided to parts etc. of boats, ships. Notification No.12/2012-Cus dated 17.03.2012 which provided for exemption of customs duty, contained the following entry: 469 Any Chapter Raw materials and parts, for us in the per manufacture of goods falling under heading 8901, 8902, 8904, 8905, (except sub-heading 8905 20) or 8906, in accordance with the provisions of section 65 of the Customs Act, 1962 (52 of 1962) Nil Nil 83 A.8. The above entry was inserted with effect from 24.11.2015. Further, the above Notification has since been superseded by Notification No. 50/2017-CUS dated 30.06.2017; with the exemption being provided under SI.No. 559 in the new Notification. A.9. Similarly, in the context of Central Excise, Notification No. 12/2012-CE dated 17.03.2012 also exempted "raw materials and parts of ships etc. The relevant entry 306C, which was inserted by Notification No. 44/2015-CE dated 24.11.2015 reads as under: 306C Any Chapter Raw materials and parts, for use in the manufacture of goods falling under heading/tariff item 8901, 8902, 8904, 00 00, 8905 (except tariff item 8905 20 00) or 8906... A.10 From the above, it can be seen that whenever exemp....
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....ct, 2017. The term, 'part as defined in Black's Law dictionary means "an integral portion, something essentially belonging to a larger whole, that which together with another or others makes up a whole B.3. Further, as per Cambridge English Dictionary, part means 'a separate piece of something or a piece that combines with other pieces to form the whole of something. One of the pieces that together form a machine or some type of equipment'. B.4. Relying on the aforesaid definitions, it is submitted that "part" means an essential and integral piece of a goods without which the goods are incomplete. B.5. It is a well settled law that in a taxing statute, words of everyday use must be construed not in their scientific or technical sense but as understood in its popular sense, meaning that sense with which people conversant with the subject matter of the statute would attribute. In essence, it is to be construed as understood in common parlance or language. The doctrine of common parlance becomes clearly applicable in the instant case to establish that in common parlance, 'parts of goods' would include within its ambit batteries essential for operation of the....
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....er supplied by these batteries. Hence, without such batteries, the submarines will not be able to function. Hence, the batteries are an essential part of the warship / submarine and hence, ore liable to be covered under SI. No. 252 of Schedule 1 of the Rate Notification. C. THE INTENTION OF THE LEGISLATURE IS NOT TO HAVE HIGH GST ON ESSENTIAL SUPPLIES TO MINISTRY OF DEFENCE, GOVERNMENT OF INDIA. C.1. The batteries supplied by Applicant are used by the Ministry of Defense in warships as is evident from the end user certificate, the supply undertaken by the Applicant is chargeable to GST @ 5%. C.2. Applicant has already made detailed submissions above that batteries supplied by it, forms an essential part of the warships as it is specifically designed and manufactured for use in warships and without such batteries, the warships cannot function. C.3. It is submitted that it can never be the intention of the legislature that goods procured by the Armed Services are taxed at the highest rate of taxation. The said goods being procured for use in National Defense cannot be taxed as batteries being supplied for luxury items. C.4. It is humbly submitted for the kind consideration of th....
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....ficer was absent. The Authorized representative made oral and written submission with regard to their application. 4.3 Heard the matter. 05. OBSERVATIONS AND FINDINGS: 5.1 We have perused the records on file, facts of the case and the submissions made by the applicant. The matter is related to the rate of GST on the supply of goods by the applicant. The applicant has made both, oral and written submissions. 5.2 Applicant manufactures and supplies of lead acid storage batteries falling under Chapter 85 of the First Schedule to the Customs Tariff Act 1975. The present application has been made by them in respect to supply of batteries for use in warships, specifically submarines, by Indian Navy as per orders received. The issue before this authority is whether Entry No. 252 of Notification No. 01/2017-Integrated Tax (Rate) is applicable to the supply of batteries to the Indian Navy. 5.3 Applicant has made submissions stating that the said supply of batteries to the Indian Navy, for use in submarines are subject to tax @ 5% under Entry No. 252 of Schedule I to Notification No. 01/2017 Integrated Tax (Rate) dated 28.06.2017 because the said batteries are understood to be a part of....
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..... We find that the word, "Part/Parts" has not been defined under GST Laws. In view of this first we are required to understand the general meaning of the word 'Part/Parts' which is of relevance to us in the present case. ------We find that as per Cambridge English Dictionary: Part as a noun - a separate piece of something or a piece that combines with other pieces to form the whole of something -------One of the pieces that together form a machine or some type of equipment. It has other meanings also in other context which are not of relevance in present context like: ----a single broadcast of a series of television or radio programme or Division of a story. ----one of two or more equal or almost equal measures of something etc. 5.7.1 In view of the above meanings/definitions of parts, we are required to examine as to whether the subject goods can be taken to be covered within the meaning of Parts of Goods of CTH 8901, 8902, 8904, 8905, 8906 and 8907 and for Sr. No. 252 of Notification No. 1/2017 Integrated Tax (Rate) dated 28.06.2017. 5.7.2 We find that batteries are essential parts of a submarine. A submarine cannot be imagined to be in existence without bat....
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....ings 8901, 8902, 8904 to 8907. We agree with the applicant's contention that the batteries supplied by them for exclusive use in goods falling under heading 8901, 8902, 8904 to 8907 will be taxable @ 5% IGST (2.5% CGST and SGST each). However it is to reiterate that the benefit of reduced CGST and SGST for such batteries is only available if the said batteries are used as parts of goods falling under heading 8901, 8902, 8904 to 8907 of the GST Tariff. The benefit of reduced GST rates would not be available in respect of subject batteries supplied for use in goods other than goods of heading 8901, 8902, 8904 to 8907 of the GST Tariff. 5.8 We find that, batteries are essential requirements in manufacture of submarines and are classified under heading 85 of the GST Tariff and are parts of submarines. Since the subject goods are meant for use in manufacture of submarines and are supplied for purpose of use or application in manufacture of goods that are classifiable under Tariff headings 8901, 8902, 8904, 8905, 8906, 8907, the said goods can be considered as parts of a submarine. Entry at Sr. No. 252 covers goods which merit classification under "Any Chapter" of the GST Tariff whe....