TMI Blog2022 (12) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... raft engines and other aircraft components or parts. In the instant case the applicant is providing maintenance and repair services of test bench equipment (Mermoz system) which are used for testing air worthiness of an aircraft. The said equipment does not qualify to be an aircraft or as an aircraft engine. To be termed as 'other aircraft components or parts', it should form a constituent piece or ingredient that is used to build an aircraft, which is not the case here. The test bench equipment (Mermoz system) neither forms part of aircraft nor forms a component of aircraft and therefore the said entry at SI.no.25 (ia) of Notification No. 11/2017-Central Tax(Rate), dated: 26.06.2017 as amended vide Notification No.02/2020-Central Tax (Rate), dated: 26.03.2020 and the concessional rate of GST of 5% is not applicable. The place of supply needs to be determined to decide whether the impugned supply of services by the applicant amounts to export of services or not. The determination of place of supply is beyond the jurisdiction of this authority and we don't intend to discuss the other issues / points of the definition. - KAR ADRG 46/2022 - - - Dated:- 2-12-2022 - D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and hence is admissible under Section 97(2) (a) and Section 97(2)(b) of the CGST Act 2017. 5. BRIEF FACTS OF THE CASE: The applicant furnished the following facts, relevant to the issue: 5.1 The applicant stated that they are wholly owned subsidiary of Spherea Test Services (herein after referred to as Parent Company ). The Parent Company has entered into an agreement to provide a set of services to a customer in France who in turn has agreed to provide such services to a customer in India. Further, the Parent Company has subcontracted those works to Spherea India. 5.2 The applicant stated that two equipments (test benches for aeronautics cases) are sold by the Parent Company to their customer in India. These test benches are currently with Indian Air Force at their operational forward bases. 5.3 The applicant stated that these test benches are used to test and prove the airworthiness of the aircraft's equipment. Also, on detection of any errors, the test benches are used for determination and correction of the errors which will ensure the safe flight of these aircraft. In this regard, Spherea India shall provide a set of services with respect to the test ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in pari-materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 9. We have considered the submissions made by the applicant in their application for advance ruling. We have also considered the issues involved on which advance ruling is sought by the applicant and the relevant facts along with the arguments made by their authorized representative and also their submissions made during the time of hearing. 10. The Applicant, a wholly owned subsidiary of M/s Spherea Test Services, a joint stock company of France (herein after referred to as Parent company). The Parent Company sold two equipments i.e test benches for aeronautics cases are to their customer in India and these test benches are currently with Indian Air Force (IAF) at their operational forward bases. These test benches are used to test and prove the airworthiness of the aircraft's equipment. The test benches also, on detection of any errors, are used for determination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ATE) aimed at testing Line Replaceable Units (LRU) and repairing with the use of Test Program Sets (TPS) and is composed of the System Hardware, the System Software and the related documentation. Incident : Malfunction which prevents end user from using its MERMOZ system(s) and / or TPS (s) as described in the Technical Specifications or, when applicable, as described in the relevant documentation. Line Replaceable Unit (LRU) : designates the unit which is designated by the plan for maintenance to be removed from a higher assembly (aircraft/system) in the latter operational environment. LRU P/N (Line Replaceable Unit Part Number) : A unique set of numbers identifying an LRU. MRO's activities : designates the support and maintenance, repair and overhaul services related to the MERMOZ System and TPS described in Exhibit A hereunder, which are defined in Articles 2 and 6 of the agreement. System Hardware : designates the set of supplies forming the hardware of the MERMOZ System and made of measurement devices, signal generators, a switching unit (link to LRUs), a test control computer (for process control), and its peripheral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abricated metal products, machinery and equipment 998719 : Maintenance and repair services of other machinery and equipment. This service code includes maintenance and repair services of, instruments and apparatus for measuring, checking, testing and navigating and other purposes such as aircraft engine instruments. 19. In view of the above, the impugned services are covered under maintenance and repair services of other machinery and equipment and are classifiable under SAC 998719. The applicant contends that their services are classifiable under 9987 as Maintenance, repair or overhaul services in respect of aircrafts, aircraft engines and other aircraft components or parts and hence are taxable to GST @ 5%, in terms of entry No.25 (ia) of Notification No.11/2017 -Central Tax(Rate), dated: 26.06.2017 which is inserted vide Notification No.02/2020 -Central Tax (Rate), dated: 26.03.2020. Now we proceed to examine whether the said entry is applicable to the instant case or not, for which we invite reference to the said entry, which is as under: SI.No. Chapter, Section or Heading Description of Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (6) export of services means the supply of any service when,- (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange 1 [or in Indian rupees wherever permitted by the Reserve Bank of India]; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; 22. From the above it is evident that the place of supply needs to be determined to decide whether the impugned supply of services by the applicant amounts to export of services or not. The determination of place of supply is beyond the jurisdiction of this authority and we don't intend to discuss the other issues / points of the definition. Thus the second portion of third question can't be answered. 23. In view of the foregoing, we pass the following RULING i. The services provided by the Applicant to its parent company relating to the test benches are not classifiable under ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
