TaxTMI 
TaxTMI 
2024 (9) TMI 1283
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....Sr.No. Equipment Full Form Description Remarks A GPS Global Positioning System Used for establishing ship's latitude and longitude Is an essential part of ship and without it the ship would not be performing its essential function and therefore would be part of a ship. B Echo Sounder Echo Sounder Used to find depth under the sea Is an essential part of ship and without it the ship would not he performing its essential function and therefore would be part of a ship. C Radar Radio Detecting and Ranging Used to detect objects at sea Is an essential part of ship and without it the ship would not be performing its essential function and therefore would be part of a ship. D ECDIS Electronic Charts Display & Information System Used to show locations for navigation Is an essential part of ship and without it the ship would not be performing its essential function and therefore would be part of a ship. E GYRO Gyroscope Used for navigation Is an essential part of ship and without it the ship would not be performing its essential function and therefore would be part of a ship. f AIS Automatic Ident....
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....f a ship. O NDB Non Directional Beacon Used for choppers to determine landing location on board Would be in the nature of an additional equipment and therefore cannot be considered as part of a ship. P FCV Fish Finder Used for higher level accuracy and clear fish shoal images Would be in the nature of an additional equipment and therefore cannot be considered as part of a ship. Q SONAR Sound Navigation and Ranging Used for searching underwater fishing Would be in the nature of an additional equipment and therefore cannot be considered as part of a ship. R LSA/FF Life saving/Firefighting Appliances Used for safety of crew, vessel and passengers Would be in the nature of an additional equipment and therefore cannot be considered as part of a ship. S BANWAS Bridge Navigation Watch Alarm System The bridge is manned at sea during voyage, else alarm is issued by the unit for safety of ship Is an essential part of ship and without it the ship would not be performing its essential function and therefore would be part of a ship T SART Search and Rescue Transponder Used to assist Coast Guard in search and ....
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....ire floats, dredgers and other vessels. * Heading 8906 and 8907 is for other vessels arid floating structures. 7. The applicant further states that * such goods cannot be classified as spares separately in their own right; that they are becoming non-competitive in the market if they do not avail the benefit of' entry no. 252 of notification No. 1/2017-Central Tax (Rate) which specifically covers parts of goods of various types of the ships and vessels covered under headings 8901,8902, 8904, 8905, 8906, 8907; * that they are selling equipment and parts/spares of critical nature and are mandated by IMO (International Maritime Organization), which are essential to establish the sea worthiness of a ship and therefore cannot be simply regarded as "spares" or equipment; * that in terms of explanation to notification No. 01/2017-CGST dated 27.06.2017 the classification of goods should be as per the rules of classification enshrined in the Customs Act, 1962; * that they wish to rely on rule 3 (a) of the General Rules for Interpretation [GRI] (inadvertently mentioned as Customs Valuation Rules by the applicant) to argue that the heading which ....
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....ate) dated 28th June, 2017 and liable to IGST @ 5%; that otherwise it would be classifiable to their respective tariff head and GST rate would be applicable as per their respective tariff head. 11. Owing to change in the Member of the GAAR, a fresh personal hearing was granted on 30.7.2024. The applicant vide his email dated 29.7.2024, enclosed copies of bills of entry and further stated that they did not wish to attend the hearing and requested to pronounce the ruling on the basis of earlier submissions and hearing. Discussion and findings 12. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act. 13. We have considered the submissions made by the applicant in their application for advance ruling as well as the submissions made during the course of personal hearing. We have also considered the issue involved, the relevant facts & the applicant's submission/interpretation of law in respect of question on which ....
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....r unfinished, provided that, as presented, the incomplete or unfinished articles has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3. 3. When by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:- (a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer t....
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....Propellers and paddle wheels (heading 84.87). (9) Rudders (headings 44.21, 73.25, 73.26, etc) and ether steering or rudder equipment for ships or boats (heading 84.79). 15. from the facts, we find that the applicant imports the items mentioned at Annexure l-A supra, the applicant is primarily engaged in supply of the imported goods which he claims to be an essential part of the ship and makes the ship 'sea worthy'. These goods are imported by the applicant on payment of IGST. During the course of supply post importation, the applicant charges GST on parts/equipment classifying it under the same tariff head as mentioned in the import documents, the applicant is before this Authority primarily on the ground that his customers are of the opinion that notwithstanding the classification of the goods during the course of import, the said goods when supplied to these customers would fall within the ambit of chapter heading 8901, 8902, 8904, 8905, 8906 & 8907 and thereby be eligible for benefit of Sr. No. 252 of notification No. 1/2017-CT (R) dated 28.6.2017. 16. The applicant in Annexure-2, paragraph 4, has provided an example in respect of the imported product viz "Standar....
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.... us, therefore, is whether a change in classification is permissible. This has to be seen in background of a pointed question to the authorized representative during the course of personal hearing to whether the goods were sold as such, to which he replied in affirmative. 20. We do not agree with the averments raised by the applicant that the classification can be changed by the applicant post importation at the stage of further supply of the said goods. The classification of the imported goods would not change i.e. remain the same, more so since [a] the applicant without any protest agreed with the classification done by Customs and discharged the duties; and [b] classification under GST is based on Customs Tariff Act, 1975, in terms of explanation (iii) and (iv) of notification No. 1/2017-CTR dated 28.6.2017; [c] that there is no change in the character of the goods supplied by the applicant to the one imported. 21. Our aforementioned finding is substantiated by the below mentioned judgements viz * M/s. Ashwani Homeo Pharmacy [2023 LiveLaw (SC) 397] CA No. 9525/2018, wherein the Hon'ble Supreme Court held as follows : 31.............
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....at classification cannot be changed or questioned at consignee's end as has been held in the case of Steel Authority of India Ltd. [(2022) 382 ELT 10 (SC)] 22. The applicant states that the goods/spares which consequent to its imports are supplied on ships are mostly essential part of ship to make it sea worthy. As far as this claim goes, we are also mindful of the HSN explanatory notes of chapter 89 under which the applicant wants his goods to be classified after the imports are made under various tariff items as is mentioned in para 13 above, which states that contrary to the provisions relating to the transport equipment falling in other Chapters of Section XVII, this Chapter excludes all separately presented parts (other than hulls) and accessories of vessels or floating structures even if they are clearly identifiable as such. Such parts and accessories are classified in the appropriate headings elsewhere in the nomenclature. The relevant portion of the explanatory notes is already reproduced in paragraph supra. 23. The applicant has relied upon the advance ruling dated 18.7.2018 in the case of M/s. A.S. Moloobhoy Private Limited ARA No. GST-ARA-14/2018-19/B-71 during th....