9911796707
TMI Blog2020 (1) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... alify as distinct persons under the GST regime. Hence, basis entry 2 of Schedule I of the CGST Act, any supply of goods or services from the HO to BO would be covered in the scope of supply and trigger a levy of GST - It is irrelevant to admit that the said charge towards maintenance of aircrafts from HO to BO is merely an internal MIS entry and should not be looked at as provision of services by HO to BO because they both have separate GST registrations and qualify as distinct persons under the GST regime - the charges of maintenance from HO to BO shall qualify as supply of service and GST is payable on the said charges recovered from BO s. Input tax credit distribution method from HO to BO - HELD THAT:- The ISD is the recipient as defined under section 2(93) of the CGST Act as it is the person making payment of consideration for the supply of goods or services. The very basis of the ISD related provisions under the CGST Act is that the ISD is not a supplier of goods or services, does not make any outward supply under section 2 (83) of the CGST Act but is entitled to distribute credit under the provisions related to distribution of ISD under the CGST Act and the rules mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n aircraft under lease model. For the same, the applicant has entered into various contracts, (contractual location being Haryana) with different vendors on which the IGST is being paid under reverse charge mechanism @ 5% on the lease rentals in the State of Haryana. Further, the spares are also ordered by the HO of the Company located in the State of Haryana and the bill of entry for customs clearance is also filed with the GSTIN of the State of Haryana and however the goods are dispatched at the respective locations as per the requirement. Similarly, the Company also procures assurance services (for repair of aircraft) from vendors located outside India in the State of Haryana and pays the GST under reverse charge mechanism in the State of Haryana. 1.4 That the said aircrafts in running condition are being used by all the other BO s of the Company wherever the airport is located. However, the cost of the said expenses (as referred to above) is being borne by the HO as the said aircrafts along with the spares therein are used at multiple locations at any given point of time for e.g., An aircraft in a day may fly from Delhi to Mumbai, then from Mumbai to Ahmedabad, then Ahmedaba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business; (c) the activities specified in Schedule I, made or agreed to be made without a consideration; and (d) the activities to be treated as supply of goods or supply of services as referred to in Schedule II In the present case, the applicant is providing maintenance services, supply of spare parts for a consideration in the course of or furtherance of business and hence the supply amounts to supply under Section 7(1) of the CGST Act, 2017. 3.1.2 Entry 2 of Schedule 1 of the CGST Act states the following: Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business 3.2 The applicant has submitted that the company (HO) under the GSTN of Haryana provides services in nature of assurance for aircraft repair alongwith any other cost related t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid amount shall be credited to the electronic credit ledger of such person . 3.10 The applicant want to know whether the input GST credit wrt procurements referred to in this application needs to be claimed by the Applicant under the normal GSTIN of the Company or the Applicant needs to take a separate GSTIN as an input service distributor to distribute the GST credits from HO to BO? 3.11 Now, it is necessary to understand the procurements referred in this application on which the applicant takes input tax credit. In this regard it is found that the company procures various goods/ services directly used for air transportation services (including passenger and cargo) for all other sates at its corporate office Haryana ( HO ) under the GSTN of Haryana (Bill to Location) and while the goods are delivered at the respective locations ( BO ), which inter-alia includes the following: (i) Services in the nature of lease of aircraft; (ii) Services in the nature of assurance for aircraft repair; (iii) Spares for aircrafts; and (iv) Any other cost related to upkeep and maintenance of aircraft incurred by the HO 3.12 Now, to decide the method of distribution of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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