Authority for Advance Ruling — Rate of Tax for Marine Propellers – The applicant is a manufacturer of Marine propellers, Rudder set, Stern tube set, Propellers shaft, MS shaft for couplings used in fishing or floating vessels. The applicant requested advance ruling to know (i) the tax rate of Marine propellers, Rudder set, Stern tube set, Propellers shaft, MS shaft for couplings (ii) whether all parts of fishing /floating vessels comes under SI.No.252 of 1st Schedule, or Sl.No.371 of 3rd Schedule (iii) whether replacement of parts during warranty period constitute supply under GST (iv) whether eligible to avail 18% input tax credit on purchase of raw materials, as the manufactured products taxable @5% under 247/252 of 1st Schedule. The applicant submitted that as per order No. CT/5496/18-C3 Dt.29-05-2018 ruling issued that commodities such as Marine Propellers, rudder set, stern tube set, propeller shaft and MS shaft for couplings used as a part of fishing /floating vessels would come under entry 252 of 1st schedule and taxable @5% GST. However there is no clarity on the tax rate applicable to the parts shipping vessels as the raw materials attract 18% tax.
Held that:- The Hon’ble Authority for Advance Ruling ruled out that the tax rate of Marine propellers, Rudder set, Stern tube set, Propellers shaft, MS shaft for couplings used as part of fishing vessels, factory ships and other vessels for processing or preserving fishery products are taxable @5% GST and all parts of fishing / floating vessels come under the HSN Code 8902 are taxable @5% under Serial No.252 of 1st Schedule. Further ruled that where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies, un-utilized input tax credit at the end of any tax period can be claimed as refund.Saraswathi Metal Works [2018] 5 TAXLOK.COM 90 (AAR-Kerala)