GST applies on C-295 Aircraft Supply to MoD: Gujarat AAR

In re Airbus Defence and Space SA (GST AAR Gujrat)

Summary: The Gujarat Authority for Advance Ruling considered whether Airbus Defence and Space S.A., Spain, through its Project Office in India, was liable to pay GST on the supply of forty C-295 aircraft to the Ministry of Defence and whether it was required to obtain GST registration in Gujarat.

Under the Aircraft Contract dated 24.09.2021, Airbus was to supply fifty-six C-295MW aircraft, of which sixteen were to be delivered ex-works from Spain and forty were to be manufactured in India by Tata Advanced Systems Ltd. (TASL), the appointed Indian Aircraft Contractor, at its facility in Vadodara, Gujarat.

Airbus entered into an IAC Contract dated 29.10.2021 with TASL for manufacture and supply of the forty aircraft. The Authority examined the transaction under [Section 7 of the CGST Act, 2017](https://taxguru.in/goods-and-service-tax/section-7-scope-supply-cgst-act-2017.html), including Schedule II, and noted that the aircraft constituted “goods” and that the transaction involved consideration in the course or furtherance of business. The applicant was to procure the aircraft from TASL at Vadodara and subsequently supply them ex-works to the Ministry of Defence at the same location. Title and ownership were to transfer to the applicant at the IAC facility upon execution of the Acceptance Certificate, following which the aircraft were to be accepted by the Ministry of Defence.