2022 (5) TMI 959 - AAR - GST

Classification of supply - supply of goods or supply of services - contract with Airbus Defence and Space, S.A.U., Spain (Airbus) for manufacture and supply of MW transport aircraft with associated equipment under its C295 aircraft programme - classification - rate of tax - value to be adopted for the purpose of payment of GST - time of supply for payment of GST - HELD THAT - The subject Application premature at this stage. Any change in the place of the Orders must be notified to the Purchaser in writing by the Supplier with sufficient prior notice - No such intimation for change in the place of the Orders notified to the Purchaser in writing by TASL, as per said clause 2.2.1 at page number 14 of the said Contract, has been placed/ produced. The Application is rejected as non-maintainable under Section 95(a) CGST Act.

Summary

Issues:
1. Nature of supply under the contract between the Applicant and Airbus.
2. Appropriate classification and rate of tax of the said supply.
3. Value for the purpose of payment of GST.
4. Time of supply for payment of GST.

Nature of Supply:
The Applicant sought an Advance Ruling to determine the nature of supply under a contract with Airbus for manufacturing and supplying aircraft. The Applicant questioned whether the supply qualifies as 'supply of goods' or 'supply of service.' However, the Revenue did not provide any submission or appear for the hearing. The Applicant, Tata Advanced Systems Limited, submitted additional information stating that the proposed manufacturing operations would be undertaken in the State of Gujarat.

Classification and Tax Rate:
The Applicant also sought clarification on the appropriate classification and tax rate for the supply under the contract. They emphasized that the manufacturing activities would take place in Gujarat and provided details regarding discussions with local authorities and site surveys conducted in the state. The Applicant highlighted the importance of final assembly of aircraft at a location co-located with an airport for delivery to the Ministry of Defence in a fly-away condition.

Value for GST Payment and Time of Supply:
The Advance Ruling Authority noted that the Applicant, registered in Gujarat, had entered into a contract with Airbus and Tata Consultancy Services. The Authority found the application premature due to discrepancies in the contract regarding the project execution address. The contract specified a project execution address in Bengaluru, Karnataka, and no formal intimation of a change in project execution location was provided by the Applicant. Consequently, the Authority rejected the application on grounds of lack of locus standi and non-maintainability under the CGST Act.

Distinct Persons under GST:
The Authority emphasized the distinct legal entities created by different GST registrations held by the Applicant in Ahmedabad, Bengaluru, and Hyderabad. Referring to Section 25(5) of the CGST Act, the Authority highlighted that establishments in different states or union territories are treated as distinct persons for GST purposes. This legal distinction further supported the rejection of the application as non-maintainable under Section 95(a) of the CGST Act.

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