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The Out Board Motors and its spare parts supplied for use in vessels falling under Customs Tariff Heading 8902 shall attract GST at the rate of 5% as per entry at Sl. No. 252 of Schedule I of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. If it is supplied for use other than as parts of goods of headings 8901, 8902, 8904, 8905, 8906 and 8907 as stated above. GST at the rate applicable under the respective Customs Tariff Headings in which they are classified will apply.

Classification of goods— In the instant case, the applicant is having their principal place of business in Kerala at Chulickal in Ernakulam District. The applicant operates in the States of Tamil Nadu, Karnataka, Gujarat, Maharashtra and Orissa and is the authorized distributor for Yamaha Motor Company's marine products since 1979. The applicant imports and supplies Yamaha Out Board Motors and related parts to their various customers in India. Imports are channelized through their offices located in the State of Tamil Nadu. The applicant also provides repairs and maintenance service for Out Board Motors and also sells spare parts of marine engines.

The applicant had requested an advance ruling on the following:

Applicability of GST rate of 5% for outboard motors pertaining to HS Code 8407 and its spare parts as per Entry in Schedule I, Sl. No. 252 of GST Act, 2017 dated 28.06.2017. GST rate of 28% shown in Schedule IV Sl. No.114 is not applicable for sales made by the applicant.

Whether the clarification issued vide Circular No.52/26/2018-GST (Point 10.1) is applicable in the instant case.

To classify the products, the provisions of Notification No 01/2017 Central Tax (Rate) dated 28.06.2017 are to be verified. The Outboard motors imported by the applicant are classified under Customs Tariff Heading 8407 21 00 - Outboard motors - Marine Propulsion engines - Spark-ignition reciprocating or rotary internal combustion piston engines and attract GST at the rate of 28% as per entry at Sl. No. 114 of Schedule IV of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. Fishing vessels, factory ships, and other vessels for processing or preserving fishery products fall under Customs Tariff Heading 8902 and are liable to GST at the rate of 5% as per entry at Sl. No. 247 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. However, as per entry in Sl. No. 252 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017 parts of goods of headings 8901, 8902, 8904, 8905, 8906, 8907 falling under any chapter of the Customs Tariff attracts GST at the rate of 5 %. Therefore, if the Outboard motors are supplied for use as part of a fishing vessel falling under Customs Tariff Heading 8902, then OBM as part of the fishing vessel will only attract GST at the rate of 5% as per the entry at Sl. No. 252 of Schedule I of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017.

Held that—

The Out Board Motors and its spare parts supplied for use in vessels falling under Customs Tariff Heading 8902 shall attract GST at the rate of 5% I2.5%-CGST + 2.5% SGST] as per entry at Sl. No. 252 of Schedule I of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. If it is supplied for use other than as parts of goods of headings 8901, 8902, 8904, 8905, 8906 and 8907 as stated above. GST at the rate applicable under the respective Customs Tariff Headings in which they are classified will apply.

The clarification issued vide Circular No.52/26/2018-GST is applicable in the instant case.