9911796707
TMI Blog2019 (9) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... her than those for personal use and Serial No. 176 mentioned above will only be applicable if the said aircraft will be for personal use. Hence at this point of time it is not possible for us to answer their question due to lack of sufficient and conclusive information supplied by the applicant. - GST-ARA-01/2019-20/B-96 - - - Dated:- 23-8-2019 - SHRI B. TIMOTHY, AND SHRI B.V. BORHADE, MEMBER PROCEEDINGS (under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by M/s. B.G. Shirke Construction Technology Pvt Ltd, the applicant, seeking an advance ruling in respect of the following question. What is the applicable rate of GST on sale of aircraft by an NSOP holder to a private company who have applied for NSOP license, to be used for purposes such as corporate leisure, pilgrimage, cargo chartered flights? At the outset, we would like to make it clear that the provisions of both the CG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the questions(s) on which advance ruling is required: 1. At the outset, the applicant submits that the aircraft sought to be procured by K-Air is not used for personal use. Accordingly, in the view of the applicant, the goods should attract GST @ 5% under Chapter heading 8802 2000. Classification under GST 2.1 K-Air does not have license for non-scheduled operator services. In order to qualify for non-scheduled operator services, an operator has to possess at least one flight/aircraft. It is for this reason that K-Air intends to purchase the said aircraft from the applicant. 2.2 According to Civil Aviation Requirement (CAR) issued on 01.06.2010, non-scheduled operator services is defined as air transport service, other than a scheduled air transport service being operated for carriage of passengers, mail and goods, and includes charter operations. 2.3 Section 3(49) of Aircraft Rules, 1937 inter alia provides that scheduled operator services refer to those operators who operate transport services in accordance with a fixed schedule. Relevant portion of Section 3(49) of Aircraft Rules, 1937 is reproduced here as under - (49) Scheduled air transport service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ession personal use is used in contradistinction with official or public use. Personal use means private use . Personal use, in the context of the above entry, would mean something which would be applied for private application only. Anything for personal/private use or for personal consumption will entail an exclusive right of the owner over it. It cannot be transferred. It cannot be alienated for a consideration. For eg: Permanent Account Number (PAN) belongs exclusively to a person who possess it. It cannot be used by anyone else. Similarly, personal bank account would imply that the bank account is intended to be operated used by the holder only. Likewise, personal assistant would mean that that the said person would be available at the disposal of his/her senior/boss only. A personal loan would signify that the same can be used and applied for any personal/private purpose. There are examples a galore. However, in the instant case, the factual position is to the contrary. The aircraft is not for personal use. The same is intended to be purchased only to be let out and be used for by the general public. In support of this submission, the applicant wishes to place rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OC will allow K-Air to import aircrafts, develop the infrastructure, prepare the necessary documents, recruit and train manpower etc. 2.1 At the outset, in its reply, the Respondent contends that K-Air does not have license for non-scheduled operator services from the competent authority. In order to qualify for non-scheduled operator services, an operator has to possess at least one flight/aircraft. It is for this purpose that K-Air decided to purchase aircraft from the applicant. The said contention is incorrect. 2.2 The applicant submits that K-Air has applied for an NOC as per Section 5.1.1 of the Civil Aviation Requirements dated 01.06.2010. The NOC granted by Ministry of Civil Aviation is valid for a period of three years. It is within this period that the purchaser has to obtain an NSOP license for operation of nonscheduled air transport. K-Air has not purchased the aircraft yet as it was waiting for the competent authority to grant them the initial NOC for operation of non-scheduled air transport. Relevant extract of Section 5 is reproduced as under for reference. 5. PROCEDURAL REQUIREMENTS Broad guidelines for issue of a Now-Scheduled Operator s Permit are con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omatically cancelled if the applicant does not take effective steps to obtain the Non-Scheduled Operator s Permit within this period. 5.1.5 In case /he application for initial NOC did not contain a request for acquisition of aircraft, the applicant may apply for permission for import or local acquisition of aircraft to the Ministry of Civil Aviation as per Annexure IV after the issue of initial NOC. 5.1.6 Based on the approval granted by the Ministry, the applicant shall apply in the proforma prescribed in Annexure IV (Part II) to the DGCA, New Delhi for the issue of NOC to import the aircraft. After such scrutiny as may be considered necessary, the DGCA may grant the applicant NOC for acquisition/import of the aircraft upon being satisfied that the applicant has achieved a reasonable level of preparedness. The operator shall be required to show his preparedness in accordance with provisions of paragraph 7 by filling the checklist given at Annexure IX. Additionally, he may also be called upon to demonstrate the same at a preparedness meeting convened by DGCA. 5.1.10 The aircraft imported for NSOP purposes shall not be disposed off to a party within India intending to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... license is granted by the competent authority is the non-scheduled operator barred/deprived from the right to use the aircraft for personal use. Hence, according to the Respondent, even after obtaining the NSOP license, the said aircraft can be used for personal use as and required. Hence, in a situation where the aircraft can be used for both personal as well as other than personal use, it would attract tax @28%. This submission is incorrect, in law. There is a fundamental flaw in the said argument. 3.2 First , it is submitted that such as situation has not arisen. Hence, the same is purely speculative. A ruling cannot be issued on such speculative arguments. Even if it were to be accepted as true and correct, even in that situation, so as long as the aircraft is intended for other than personal use, it would attract tax @5%. We re-iterate the submissions made in our application and for sake of brevity, the same are not repeated. 3.3 Second , it is not an end use based notification. If the Revenue is in a position to prove that the Aircraft has been used for personal use, there are provisions in the statute for recovery and collection of tax. However, the present argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undant. It is well settled that any interpretation that renders a provision of la redundant or otiose should be avoided. The legislature is a perfect legislative body. It is presumed to know all the laws when it enacts any particular legislation. In Union of India V/s Hansoli Devi (2002) 7 SCC 273 = 2002 (9) TMI 799 - SUPREME COURT the Hon ble Supreme Court has observed that the legislature never waste s it words or say anything in vain and a construction which attributes redundancy to legislation will not be accepted except for compelling reasons. In Sultana Begum V/s Prem Chand Jain (1997) 1 SCC 373 = 1996 (12) TMI 388 - SUPREME COURT , at page 381, the Hon ble Apex Court has held as under: 15. On a conspectus of the case-law indicated above, the following principles are clearly discernible: (1) It is the duty of the courts to avoid a head-on clash between two sections of the Act and to construe the provisions which appear to be in conflict with each other in such a manner as to harmonise them. (2) The provisions of one section of a statute cannot be used to defeat the other provisions unless the court, in spite of its efforts, finds it impossible t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under MGST Act Having GSTN 27AAACB72931ZQ. The registered office of the company is at 72-76, industrial Estate, Mundhwa, Pune-411036.The principal business activity of the dealer is of construction of infrastructure projects, buildings. Besides this the dealer also undertake the activity of Aviation Chartering. The applicant has an aviation chartering division. So as to do this business the operator needs the permit issued by the Ministry of Civil Aviation, Govt. of India. Such permits are referred as non-scheduled operators permit (NSOP). The applicant dealer is having such permit. Issue involved in the case Now the applicant dealer is intending to sell his one aircraft to another dealer le M/s K-Air, which is registered as Travian Flight Services (P) Ltd. Therefore the applicant dealer wants to know the rate of tax applicable to sale of air crafts. Observations As per notification no. 1/2017-C.T. (Rate) 1/2017 l.T. (Rate), dated 28-06-2017, the relevant rate of tax on the sales of aircraft is as under Chapter/ Heading/ Sub heading/ Tariff item Description of goods CGST Rate SGST Rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or who intends to undertake non-schedule service operations needs to obtain the permit from the competent authority i.e from Ministry of Civil Aviation, Govt. of India. So far rate of tax applicable to the sales of aircraft is concerned it is clear that when the aircraft is used for personal use then rate of tax it has 28% along with cess @ 3%, otherwise if it is used for other than personal use i.e. for commercial purposes whether it be used as such by the scheduled service operators or non-schedule service operators rate of tax will be i.e. 5%. In the instant case the dealer intends to purchase aircraft for non-schedules transport service. However at the moment he does not have the permit to operate as non-scheduled operator. It is learnt from the applicant dealer that M/s K-Air has applied for getting this permit to Ministry of Civil Aviation, Govt. of India. It is also learnt that he intending buyer is not having/owning any aircraft till date. But as per civil aviation requirement 17 May 2000, 4.3 Before the Non-Scheduled Operator s Permit is issued, an applicant shall: 4.3.1 Be in possession of an aircraft either by outright purchase or through lease. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sh. V. K. Magar, Deputy Commr. of S.T. (E-623) LTU, Pune also appeared and made written submissions. 05. OBSERVATIONS We have gone through the facts of the case, documents on record and submissions made by both, the applicant as well as the jurisdictional office. The applicant has submitted that they are intending to sell one aircraft to M/s K. Air (purchaser), a private unlisted non-governmental company. They have submitted that the said aircraft is being purchased by K. Air for commercial purposes and not for personal use. Hence such sale of aircraft for by them to the purchaser will attract GST rate of 5% as per Notification No. 1/2017-CT (Rate) and Notification No. 2/2077 CT(Rate) dated 28.06.2017. The entire submissions made by the applicant centers around their understanding that the aircraft is intended to be used only for commercial purposes by the purchaser. As per Serial No. 244 of Schedule I of Notification No. 1/2017-CT (Rate) dated 28.06.2017 as amended from time to time, Other aircraft (for example, helicopters, aeroplanes), other than those for personal use, falling under Chapter 8802 of the GST Tariff, attract 5% tax under GST laws. As per Serial ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
