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System and onboard spares for the use in warships, vesseles and submarines meant for Indian nevy attracts 5% GST rate.

Authority for Advance Ruling — Classification of Service—Taxability on various systems supplied for Warship and Vessels – The applicant are a Government of India Enterprise under the Ministry of Defence, seeking an advance ruling on the applicability of S1.No. 252 of Schedule I of Notification No.1/2017-CT (Rate), for the supplies effected or to be effected by them for construction of, or use in, vessels, warships and sub-marines meant for deployment in the Indian Navy. The applicant submitted ruling relates to supplies effected against Purchase Orders received from various Ship Building Industries, namely, Mazagaon Dock Limited, Garden Reach Shipbuilders and Engineers, Hindustan Shipyard Limited, Larsen and Toubro etc., and directly to Indian Navy. The applicant sought an advance ruling as to whether the various systems, sub-systems and onboard spares supplied by the applicant for use in the Warships, Vessels and Submarines meant for Indian Navy and Shipbuilders, attracts 5% GST.
Held that:- The Hon’ble Authority for Advance Ruling, ruled that various systems, sub-systems and onboard spares supplied by the applicant for use in the Warships, Vessels and Submarines meant for Indian Navy and Shipbuilders (excluding consumables and raw materials) are covered under Sl. no. 252 of Notification No.01/2017-CT (Rate), and accordingly attracts 5% GST.—Bharat Electronics Limited., In Re… [2019] 15 TAXLOK.COM 088 (AAR-Karnataka)