In re M/s Antrix Corporation Limited (GST AAR Karnataka)
Whether Leasing of Satellite Transponder which is covered under SAC Code 997319 be charged at 5% GST as per HSN Code 8803 – Parts Goods of Heading 8802 (Satellites)?
The service of Leasing of Satellite Transponders, covered under SAC 9973 19, falls under the Entry No.17 (viii) of Notification No. 8/2017-Integrated Tax (Rate) dated 28th June 2017, as amended, and is taxable to GST at the rate of 5% IGST (i.e. 2.5% of CGST and 2.5% of KGST), as applicable on the supply of like goods (transponder – part of communication satellite) involving the transfer of title in goods, covered under 8803 90 00, in terms of Entry no. 245 of the Schedule I of the Notification No. 1/2017 – Integrated Tax (Rate) dated 28th June, 2017, as amended.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, KARNATAKA
1. M/s Antrix Corporation Limited, (called as the ‘Applicant’ hereinafter), Anthariksh Bhavan Campus, New BEL Road, Bengaluru – 560058, having GSTIN number 29AABCA4500B1ZE, have filed an application for Advance Ruling under Section 97 of CGST Act 2017 86 KGST Act 2017 read with Rule 104 of CGST Rules 2017 86 KGST Rules 2017, in form GST ARA-01 discharging the fee of Rs.5,000/- each under the CGST Act and the KGST Act.
2. The Applicant is a Private Limited Company and is registered under the Goods and Services Act, 2017. The applicant has sought advance ruling in respect of the following question:
Whether Leasing of Satellite Transponder which is covered under SAC Code 997319 be charged at 5% GST as per HSN Code 8803-Parts Goods of Heading 8802 (Satellites)?
3. The applicant furnishes the following facts relevant to the stated activity:
a. The applicant stated that they are a company wholly owned by the Government of India (GOI) and under the administrative control of the Department of Space, incorporated under the provisions of the Companies Act, 1956 as a private limited company on 28th September, 1992 –
(a) For the promotion and commercial exploitation of space based services and products,
(b) To provide technical consultancy services;
(c) To carry out transfer of technologies developed by Indian Space Research Organisation (ISRO); and
(d) To facilitate development of space related industrial capabilities in India.
b. The applicant is engaged in a variety of activities, inter-alia, including
(a) Leasing of space segment capacity on INSAT/GSAT satellites;
(b) Leasing of space segment capacity procured from Foreign Satellite Service Providers / Operators (“FSSP”);
(c) Launch services;
(d) Satellite Services;
(e) Remote Sensing and Data Services;
(f) Host Facility Services;
(g) Scientific and Technical consultancy services; and
(h) Integrated ground station establishment (eg. IMDPS Project)
c. The applicant is authorised by the Government of India, acting through Department of Space, to conduct a variety of commercial activities, subject to the terms and conditions and in line with the policy of the Government of India, in order to effectively implement the commercial aspect of India’s space programme and allied services, in consonance with Department of Space and ISRO.
d. The applicant stated that the communication satellite has the following basic parts:
(i) Satellite housing – This is the outside container of a Satellite;
(ii) Power System – This consists of Solar Panels as well as batteries to power the satellite;
(iii) Antenna System – This is to receive signals to make the Satellite’s operation in Orbit;
(iv) Command and Control System – This monitors the satellite to ensure that all vital operating parameters are working
(v) Transponders – Electronic Systems that amplify the frequency of an uplink signal for retransmission to earth.
A Communication Satellite cannot be without any of the aforesaid parts. There will not be utility for such equipment without transponders.
e. The Applicant stated that a transponder is an electronic system of a satellite that receives the frequency of an uplink signal and amplifies it for retransmission to the earth in a downlink frequency. The applicant leases out these transponders to its customers based on their requirement.
f. The applicant stated that in their understanding, leasing of transponders are covered under the SAC Code 997319-“Leasing or rental services concerning other machinery and equipments with or without operator”. The rate of GST applicable is covered vide Notification No.8/2017 – Integrated Tax (Rate) dated 28.06.2017 as amended till date under the following entry:
