Page 162 - GSTL_20th August 2020_Vol 39_Part 3

376 GST LAW TIMES [ Vol. 39
‘Goods’ as defined under Section 2(52) of the CGST Act, 2017, the said let out of
the Tug Jupiter on charter basis, being hiring of a water vessel for transportation
of goods, is clearly classifiable under SAC 996602.
5.4 The Applicant submits that in the alternate, since the services ren-
dered by the Tug Jupiter are in relation to oil exploration activities, the same
clearly also qualifies as a lifting and handling equipment for the offshore opera-
tions which are being conducted at the MA-D26 Oil and Gas Field, which is
about 20 nautical miles south east off Kakinada on the east coast of India approx-
imately in 1100-1400 m. depth of water.
5.4.1 The Applicant submits that the charter services of Tug Jupiter be-
ing let out in the nature of leasing or hiring of machinery, the same is clearly
covered by the SAC 997319 for the reason that this SAC specifically covers ma-
chinery and equipment on leasing or hiring basis as against SAC 996602 which
covers only rental of vessels.
5.4.2 The Applicant submits that there can be no dispute as to the fact
that a tug is a machinery. Inasmuch as the tug in question viz. Jupiter being a
machinery, hiring or leasing of the same is clearly covered within the scope and
ambit of the SAC Code 9973. This position is further substantiated from a perusal
of the entry at (vii) and (v) of S. No. 17 of the Notification No. 1/2018-I.T. (Rate),
dated 25-1-2018 read with Notification No. 8/2017-I.T. (Rate), dated 28-6-2017,
which includes time charter of vessels for transportation as also the chartering of
aircrafts respectively. Accordingly, it is submitted that the charter services of Tug
Jupiter are clearly classifiable under SAC 9973.
5.4.3 Without prejudice to the above, the Applicant submits that since
the entry at S. No. 17(viia) now specifically covers leasing of goods and as al-
ready submitted that Jupiter, being a lifting and handling equipment, clearly falls
within the meaning of the expression ‘Goods’, the said service supplied is clearly
classifiable under SAC 9973 and further covered within the scope of entry at S.
No. 17(viia) of the Notification.
6. Record of personal hearing :
Shri Ramakrishna Vuppuluri, the authorized representative of the appli-
cant filed for adjournment on 18-9-2019. Later on, appeared for Personal Hearing
on 23-10-2019 and they reiterated the submission already made in the applica-
tion.
7. Discussion and findings :
We have examined the issues raised in the application. The taxability
and the applicable rate of tax for the goods and services supplied or to be sup-
plied, as governed under the provisions of respective GST Acts are examined.
In view of the submission made by the applicant we find that the basic
issue before us is whether the Tug Jupiter that the Applicant has let out under a
charter for 730 days (with an option to extend the contract one year more) is clas-
sifiable under SAC 996602 as ‘Rental Services of water vessels including passenger
vessels, freight vessels and the like with or without operator’ attracting GST @ 5% in
terms of S. No. 10(ii) which covers ‘Time charter of vessels for transport of goods’ of
Notification No. 1/2018-I.T. (Rate), dated 25-1-2018 read with Notification No.
8/2017-I.T. (Rate), dated 28-6-2017 or under SAC 997319 as ‘Leasing or rental ser-
vices concerning other machinery and equipments with or without operators’ attracting
GST @ 5% in terms of S. No. 17(viia) of the Notification No. 1/2018-I.T. (Rate),
dated 25-1-2018, as amended by Notification No. 28/2018-I.T. (Rate), dated
31-12-2018 which covers ‘Leasing or renting of goods’ or attracting GST @ 5% in
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