2026-VIL-183-AAR
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SGST Advance Ruling Authority

GST – Maharashtra AAR - Rate of tax on maintenance, repair and overhaul services of Reverse Osmosis plant installed on warships and other vessels - Entry 25(ib) and entry 25(ii) of Notification No. 11/2017-Central Tax (Rate) - Applicant executed contracts with the Indian Navy and Indian Coast Guard for maintenance and repair of RO plants installed on board ships, involving preventive and routine maintenance, inspection of safety controls, supply of consumables and replacement of parts wherever required - Whether maintenance, repair and overhaul services of RO plant installed on ships fall under entry ‘services in respect of ships and other vessels, their engines and other components or parts’ - HELD - An earlier ruling of the Authority has held that RO plants are independent machinery used for purification of water, classifiable under HSN 8421, and are not integral parts of ships as ships can exist and function without them - The expression ‘in respect of used’ in entry 25(ib) has a wide connotation but cannot be read in isolation. The service must still be in respect of the ship, its engines or its components or parts. As the RO plant is not a component or part of the vessel, its maintenance is maintenance of independent machinery. The mere location of the RO plant on a vessel does not alter the essential character of the supply - The doctrine of noscitur a sociis applies only where the statutory expression is ambiguous and is of limited application here. Where spare parts are supplied along with maintenance, the transaction is a composite supply with maintenance of machinery as the principal supply and the entire supply is taxable at the rate applicable to such principal supply. The activity cannot be treated as works contract as RO plants installed on ships are movable machinery - The RO system is a separate plant and not a component or part of the vessel. The services of repair, maintenance and overhaul of RO plant do not fall under entry 25(ib) and are liable to GST at 18% under entry 25(ii) of Notification No. 11/2017-Central Tax (Rate) – Ordered accordingly
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