Gujarat Authority for Advance Ruling: In an application sought for advance ruling on the question that whether Goods and Services Tax (GST) rate of 5 percent under entry No. 252 of Schedule 1 of Notification No. 1/2017 of Central Tax Rate and a corresponding notification issued by Gujarat State and Notification No. 1/2017 of Income Tax Rate is applicable in the case of “Combined Wire Rope” used as a part of a Fishing Vessel, the two-member bench of Milind Kavatkar and Amit Kumar Mishra has ruled that the combine wire rope has no use in the fishing vessel, but it is used to tie the fishing net, thus, it is not covered under entry No. 252 of Schedule 1 of Notification No. L/20l7 of Central Tax (Rate) and is not eligible for GST at 5 percent.
Issue:
The main issue is to decide whether the combined wire rope is a part of a fishing vessel.
Observation:
The Authority observed that wire rope is used in various fields such as mines, haulage, engineering, lift & escalators and shipping depending upon the requirement and usage of the field. Further, wire rope is used in shipping but in the manual use of wire rope in fishing vessel has not been mentioned. Thus, wire rope has no specific or general use in fishing vessels.
It was further observed that as the fishing net is tied and hooked with fishing vessels with the help of combined wire rope,thus, the rope is not a part of fishing vessel but it’s one side is used to tie the fishing net and other side is tied on the vessel, and the main use of combine wire rope in fishing is to tie the fishing net with vessel. Therefore, fishermen required such wire rope for fishing purpose and the applicant supply such combine wire rope to them.
The Authority, while referring to the decision in Star Paper Mills v. Collector of Central Excise – (1989) 4 SCC 724 , wherein it was held that “‘Parts’ are used in the manufacturing of the final product and is an integral part of it, and it is must to complete the whole article and without it the final product will not be completed” and observed that the applicant’s cornbined wire rope is not an essential part of fishing vessel and it is not used in the manufacture of fishing vessels. Therefore, it is not eligible for the GST rate at 5 percent.
[Shakti Marine Electric Corporation, In re, 2022 SCC OnLine Guj AAR-GST 21, decided on 28.09.2022]
Advocate who appeared in this case:
R. S. Parmar, Advocate, Present for the Applicant.