Background:
The Ministry of Finance issued Press Release dated May 28, 2021 pertaining to decisions taken in 43rd GST Council meeting wherein following recommendations were made to extend the same dispensation as provided to Maintenance, Repair and Overhaul (“MRO”) units of aviation sector to MRO units of ships/vessels so as to provide level playing field to domestic shipping MROs vis a vis foreign MROs and accordingly, –
(a) GST on MRO services in respect of ships/vessels shall be reduced to 5% (from 18%).
Following notification has been issued in this regard:
Notification:
The CBIC vide Notification No. 02/2021- Central Tax (Rate) dated June 02, 2021 to amend Notification No. 11/2017- Central Tax (Rate) dated June 02, 2021 (“Services Rate Notification”) to make following changes:
- Inserted following entry in serial number 25 (i.e., Heading 9987) of the Services Rate Notification:
|
S. No. |
Heading | Description of Service | Rate | Condition |
| 25 | Heading 9987 |
(ib) Maintenance, repair or overhaul services in respect of ships and other vessels, their engines and other components or parts. |
2.5 |
– |
- In view of above amendment, amended entry (ii) of in serial number 25 (i.e., Heading 9987) of the Services Rate Notification to read as under:
“(ii) Maintenance, repair and installation (except construction) services, other than (i), (ia) and (ib) above and serial number 38 below.”
This notification shall come into force with effect from June 2, 2021.
The CGST (Rate) Notification can be accessed at: https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-02-2021-2020-cgst-rate.pdf
Similar Notification has been passed under IGST (Rate): https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-02-2021-igst-rate-english.pdf
Similar Notification has been passed under UTGST (Rate): https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-02-2021-utgst-rate.pdf