GST: Engineering Design and Other Technical Advisory Services carried out in India constitute a supply as ‘Intermediary Services’, rules AAR [Read Order]

The Karnataka Authority of Advance Ruling (AAR) ruled that the Engineering design and other technical advisory services carried out in India constitute a supply as “Intermediary services”.

The applicant Airbus Group India Private Limited provides engineering design and other technical advisory services which include marketing support, customer support services, flight maintenance training, flight operations support, flight pilot training, etc. They also provide maintenance, repairs and overhaul services, agency services, renting of assets and trading of spares and parts of helicopters.

The applicant sought the advance ruling on the issue Whether the activities carried out in India by the Applicant would constitute a supply of “Other support services” falling under HSN code 9985 or as “Intermediary service” classifiable under HSN code 9961/9962 or any other classification of services as specified under various Tariff entries of rate notification issued under Goods and Services Tax law HELD The activities carried out in India by the Applicant would constitute a supply as Intermediary services classifiable under SAC 998599.

The other issue raised was Whether the transaction in question is a Zero-Rated Supply or a Normal Supply under the GST Act, if the said supply is a Zero-Rated Supply, then can the same be considered as an export of service under the GST Act.

The coram of Dr. Ravi Prasad M.P. and Mashood Ur Rehman Farooqui ruled that the activities carried out in India by the Applicant would constitute a supply as “Intermediary services” classifiable under SAC 998599.

The AAR further ruled that the services rendered by the Applicant do not qualify as ‘export of services’ in terms of sub-section 2 of Section 6 of the IGST 2017 and consequently, are exigible to GST at the rate of 18% in terms of clause (iii) of entry no. 23 of Notification No. 11/2017-Central Tax ( R) dated June 28, 2017.

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