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2019 (9) TMI 930 - AAR - GSTClassification of services - rate of tax - Leasing of Satellite Transponder - Whether Leasing of Satellite Transponder which is covered under SAC Code 997319 be charged at 5% GST as per HSN Code 8803 Parts Goods of Heading 8802 (Satellites)? - Notification No.8/2017 - Integrated Tax (Rate) dated 28.06.2017. HELD THAT:- In the instant case satellite transponders had been leased out. Therefore the rate of tax applicable on the service of leasing of the satellite transponders shall be the same as the rate of tax as applicable on the supply of the satellite transponders. This brings us to the question of determination of the rate of tax on supply of satellite transponders which in turn requires us to determine the classification of the said goods. The transponder essentially is a repeater which receives the signal transmitted from earth station on the uplink, amplifies the signal, converts to a dissimilar frequency and retransmits the same on the downlink. Therefore the essential / significant features of amplification and frequency conversion are done by the key payload of the communication satellite i.e. the transponder. Therefore the transponder becomes an integral part of the communication satellite, without which the communication satellite becomes defunct. The Communication Satellite Transponders are appropriately classifiable under Tariff Heading 8803, more specifically under 8803 90 00. Transponders, being parts of communication satellites, are covered under 8803 90 00 and any leasing of such transponders would be covered under the Entry No. 17 of Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017 at the rate applicable as on the supply of like goods involving the transfer of title in goods - Admittedly the transponders are goods and any transfer of right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration is covered under the clause (viii) of Entry No. 17 of the said Notification.
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