Background:
In order to promote tourism, the GST Council in its 52nd meeting interalia recommended a conditional and limited duration IGST exemption to foreign flag foreign going vessel when it converts to coastal run.
As of current tax position the foreign going vessels are liable to pay 5% IGST on the value of the vessel if it converts to coastal run. GST Council recommends conditional IGST exemption to foreign flag foreign going vessel when it converts to coastal run subject to its reconversion to foreign going vessel in six months.
Notification:
Now, the CBIC vide Notification No. 60/2023-Customs dated October 19, 2023 inserted entry no. 551A to the Notification No. 50/2017-Customs dated June 30, 2017 which read as follows:
|
S No. |
Chapter or Heading or sub— heading or tariff item | Description of goods | Standard rate | IGST |
Condition No. |
|
“551A |
8901 |
Foreign Going Vessel converted for a coastal run: Provided that such vessel re-converts to a foreign going vessel within six months from the date of such conversion. Explanation. – For the purpose of this entry, (i) “Foreign going vessel” shall have the same meaning as assigned to it under clause (21) of Section 2 of the Customs Act 1962. (ii) “Conversion to coastal Vessel” shall include the vessel granted necessary license under the Merchant Shipping Act,1958 |
– | Nil | -“; |
In the Annexure, –
(I) in List 34A, with effect from 1st April, 2023 for the Financial Year 2023-24, the following entries shall be substituted, namely :- [1]
“1. Axis Bank Limited
2. Bank of India
3. Federal Bank Limited
4. HDFC Bank Limited
5. Industrial and Commercial Bank of China Limited
6. ICICI Bank Limited
7. IndusInd Bank Limited
8. Indian Overseas Bank
9. Kotak Mahindra Bank Limited
10. Karur Vysya Bank Limited
11. Punjab National Bank
12. RBL Bank Limited
13. State Bank of India
14. Union Bank of India
15. Yes Bank Limited”
(II) in List 34B, item number 2 and the entries relating thereto shall be omitted.
The Notification will come into force on October 20, 2023.
The Notification can be accessed at: https://taxinformation.cbic.gov.in/view-pdf/1009891/ENG/Notifications