Whether the vessels or ships that are afloat are not goods and immovable property? – CESTAT says Yes. – Whether GST would be applicable on sale / supply of floating vessels or ships?
Case – Commissioner of Central Excise And Service Tax (LTU) , Mumbai Versus The Shipping Corporation of India Ltd. – 2016 (8) TMI 852 – CESTAT MUMBAI
Service Tax
Case-Laws
Dated:- 23-8-2016
Commissioner of Central Excise And Service Tax (LTU) , Mumbai Versus The Shipping Corporation of India Ltd. – 2016 (8) TMI 852 – CESTAT MUMBAI
The issue though has been discussed in the context of Service Tax but has far reaching implications.
One of the reasons given by the Hon'ble tribunal (third member) while ascertaining the nature of transaction for
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ion of the dilemma of being so described. Land is, undoubtedly, immoveable property. Definition of 'goods' in the Sale of Goods Act, 1930 is, however, attracted to certain appendages of land to the extent that they can be separated from land before sale as part of contract of sale. Hence, structures that can be detached from the land are considered to be moveable. Logically, the oceans and the seas are equivalences of land and the inextricability of a vessel or ship from the waters should bring them within the ambit of immoveable. Ships before launch and for breaking up are goods but vessels or ships that are afloat are not goods except for the time that they are the subject of a sale agreement. That ships, vessels and motor vehicles need n
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s stated in clear terms that, "As conveyances, ships/vessels and motor vehicles move easily on water or land but, not being goods that are amenable to severance from land/water, are not distinguishable from immoveable property."
Now a question of millions comes into one's mind that whether GST would be applicable on the sale (or to say supply in terms of GST concept that is involving) of floating vessels or ships?
It is a fact that GST would be levied only on supply of goods and services, immovable property within the exclusive domain of State for the purpose of tax as per the Schedule VII of the Constitution of India, and therefore immovable property shall not be liable to Goods and Services Tax (GST).
Therefore, it is to
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