5% GST applicable on Leasing of Satellite Transponder: AAR [Read Order]

The authority of Advance Ruling (AAR) ruled that @5% Goods and Service Tax (GST) applicable to the leasing of satellite transponder and not on the leasing of satellite transponder services.

The applicant, M/s New Space India Limited is a commercial arm of Indian Space Research Organisation (ISRO) and is a Government of India Company (CPSE) under the administrative control of the Department of Space (DOS). The entered into an agreement MOU with DOS for leasing of Satellite Transponder capacity to service providers as a part of the mandate to carry out production and marketing of space-based services.

The applicant filed an application seeking clarification on the issue that 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).

The other issue which the applicant put forth was whether the applicant can levy GST @5% for Leasing of Satellite Transponder Services which is covered under SAC 997319 as per HSN Code 8803-parts goods of Heading 8802 (Satellites) from the date of commencement of the service-Leasing of Satellite Transponder?

The authority consisting of members Dr. Ravi Prasad and Mashhood Ur RehmanFarooqui held that @5% Goods and Service Tax (GST) applicable on leasing of satellite transponder involves the transfer of title in goods and not on the leasing of satellite transponder services where the GST is already charged and collected under any invoice.

“Any excess collection of tax needs to be paid to the government within the specified time and the mistake shall only be collected through a debit note credit note mechanism, if applicable and subjected to such conditions and within such time as specified in Section 34 of CGST Act, 2017.