The Karnataka Authority for Advance Rulings ( AAR ) held that the rate of 18% of Goods and Services Tax ( GST ) is applicable on supply of ‘EDF Thrusters with Battery Pack for Jet Suit’.
M/s. Turbotech Precision Engineering Private Limited, the applicant, a leading turbo machinery and mechanical engineering company, has developed a range of steam turbines, gas turbines, and a myriad of turbomachinery for critical applications in the process, oil and gas, and aerospace industries. The company provides adaptable and affordable turbine solutions for industrial and power generation, from the smallest requirement of a few kilowatts to as large as 5.5 MW.
The applicant sought an advance ruling on the applicable rate of tax under the Goods and Services Tax Act, 2017 on the supplies of “EDF Thrusters with Battery Pack for Jet Suit” made by the applicant to the DEBEL.
The applicant, represented by Sumith Rathi, argued that in accordance with notification 01/2017 Central Tax (Rate), supply of aircraft falling under HSN code 8802 or 8806 is covered under entry number 244 of Schedule I of the notification, and supply of parts of goods falling under heading 8802 or 8806 is covered under entry number 245 of Schedule I of the notification. Both such entries, namely entry number 244 and entry number 245, are subject to GST at a rate of 2.5%.
The bench of the authority, comprising M.P. Ravi Prasad and Kiran Reddy T, observed that the electric-ducted fan (EDF) thrusters based Jetsuit apparently derives support in the atmosphere by generating thrust against the earth’s surface. Hence, they are not covered in the definition of ‘aircraft’, and the contention of the applicant that the jetsuit is an aircraft and the EDF thrusters with battery packs are part of an aircraft, which is subject to GST at a rate of 2.5%, is not acceptable.
The bench ruled that the applicable rate of GST on the supply of “EDF Thrusters with Battery Pack for Jet Suit” is 18%.
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