2026-VIL-180-AAR
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SGST Advance Ruling Authority

GST – Maharashtra AAR - Eligibility to concessional rate of 5% on marine engines and their parts supplied as parts of fishing vessels of heading 8902, Sl. No. 252 of Schedule I of Notification No. 1/2017-Central Tax (Rate) - Applicant proposed to import marine propulsion engines of heading 8407 and 8408 and their spare parts of heading 8409 and to sell them to fishermen for use in fishing boats - Whether marine engines and their parts attract the concessional rate of 5% when supplied as parts of fishing vessels of heading 8902 - HELD - The word part is not defined in GST law, so its meaning was examined as understood in common parlance through dictionary definitions and judicial decisions. A marine engine is an essential part of a ship or vessel without which the vessel would not be complete and cannot sail, as it is essential for main propulsion and for providing auxiliary power. Sl. No. 252 covers parts of goods of heading 8902 falling under any chapter. Hence any goods, irrespective of classification, must satisfy the condition of being a part of a vessel of the specified headings - Circular No. 52/26/2018-GST also clarifies that marine engines supplied for fishing vessels attract 5% GST by virtue of Sl. No. 252. The concessional rate is conditional upon use as a part of such vessels and is not available if the goods are used in goods other than those of the specified headings. A supplier must demonstrably know and prove the end-use at the time of supply. Mere possibility of use or a buyer's declaration is insufficient unless supported by verifiable documentation - GST at 5% is applicable only when marine engines or their parts are supplied as parts of fishing vessels of heading 8902 and the applicant establishes such end-use through verifiable documentary evidence. In absence of such evidence, the normal rate applicable to heading 8407, 8408 and 8409 remains applicable – Ordered accordingly - Eligibility to concessional rate of 5% on marine engines and their parts supplied for vessels used for defence, patrolling, flood relief and rescue operations under Sl. No. 252 of Schedule I of Notification No. 1/2017-Central Tax (Rate) - Whether 5% GST can be charged on marine engines and their parts supplied for use in vessels of heading 8901, 8904, 8905, 8906 and 8907 for defence, patrolling, flood relief and rescue operations - HELD - Entry at Sl. No. 252 covers parts of goods of the specified headings falling under any chapter. Any goods, irrespective of classification, must therefore satisfy the condition of being a part of a vessel of the said headings. Marine engines are essential parts of a ship or vessel as a vessel cannot sail without them - Engines of heading 8407 and 8408 and their parts therefore attract 5% GST when supplied as parts of vessels of heading 8901, 8904, 8905, 8906 and 8907. The benefit is not available if the goods are used in goods other than those of the specified headings. The concessional rate is conditional upon proof of end-use. Mere possibility of use or a buyer's declaration is insufficient unless supported by verifiable documentation - GST at 5% is applicable only when the marine engines or their parts are supplied as parts of vessels used for defence, patrolling, flood relief or rescue operations of heading 8901, 8904, 8905, 8906 and 8907 and the applicant adequately establishes such end-use through verifiable documentary evidence. In absence of verification or clear end-use evidence, the normal rate applicable to heading 8407, 8408 and 8409 remains applicable.
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