GST AAR clarifies taxability of international passenger air transport services

In re Biman Bangladesh Airlines Limited (GST AAR West Bengal)

Biman Bangladesh Airlines Limited, an international airline operating through branch offices in Kolkata, Delhi and Chennai, sought an advance ruling on the GST treatment of international passenger transportation services in different boarding and continuous-journey scenarios. The applicant operates exclusively international flights and does not provide domestic flight services within India. The application also subsequently raised the issue of transportation of human remains from outside India to India and vice versa.

The Authority considered the place-of-supply provisions applicable to passenger transportation under the Integrated Goods and Services Tax Act, 2017. The applicant relied principally on Sections 12(9) and 13(9) of the IGST Act, contending that the place where the passenger embarks determines the place of supply. The Authority considered the corresponding provisions, including Section 13(10), which provides that the place of supply in respect of passenger transportation services is the place where the passenger embarks on the conveyance for a continuous journey.

For a passenger boarding outside India and travelling to India, such as Dhaka to Kolkata, the Authority held that the place of embarkation is outside India. Accordingly, the place of supply under Section 13(10) is outside India and the provisions of the GST Acts do not apply to the transaction, where the ticket or invoice relates only to that journey and there is no return journey.

For a passenger boarding in India and travelling abroad, such as Kolkata to Dhaka, the Authority held that the supplier and unregistered passenger are located in West Bengal and the place of embarkation is Kolkata. Applying Section 12(9), the place of supply is Kolkata. Since the location of the supplier and the place of supply are in the same State, the supply is treated as an intra-State supply under Section 8(2) of the IGST Act, attracting CGST and WBGST at the applicable rate.

The Authority also considered continuous journeys involving short transit stops. It distinguished a short transit stop from a “stopover” under Section 2(3) of the IGST Act. According to the Authority, a short transit stop which does not interrupt the continuity of the journey is not a stopover. Where there is no change of aircraft, airline or transshipment of luggage and the passenger continues the journey, such a transit stop does not break the continuous journey.

Accordingly, for a single-ticket journey from London to Kolkata through Dhaka, the first embarkation is London, outside India. The Authority held that the place of supply is outside India under Section 13(10), and the GST Acts do not apply where there is no return journey. Conversely, for a single-ticket journey from Kolkata to London through Dhaka, the first embarkation is Kolkata. The place of supply is therefore Kolkata under Section 12(9), making the transaction an intra-State supply attracting CGST and WBGST at the applicable rate.

For a single-ticket journey from Dhaka to London through Kolkata, the passenger embarks outside India and Kolkata is only a short transit point. The Authority held that the transit stop does not break the continuity of the journey. Since the place of embarkation is Dhaka, outside India, the place of supply under Section 13(10) is outside India and the GST Acts do not apply.

On classification, the Authority observed that the passenger transportation services fall under heading 9964. Since Biman Bangladesh Airlines provides regular public flights operated according to published timetables, its services were regarded as scheduled air transport services, with the specific service code identified by the Authority as 996425. For transportation of human remains, the Authority did not accept the applicant’s proposed classification as passenger or cargo transportation. It observed that transportation of human remains falls under heading 9997, relating to other services, with specific heading 99973 for funeral, cremation and undertaking services.

On the taxability of transportation of human remains, the Authority examined Section 7 of the CGST Act and Schedule III. Clause 4 of Schedule III covers “Services of funeral, burial, crematorium or mortuary including transportation of the deceased”. The Authority held that transportation of the deceased is treated as neither a supply of goods nor a supply of services. Consequently, such transportation does not fall within the ambit of Section 7(1) and there is no question of GST being imposed on the service.

The Authority therefore ruled that passenger transportation commencing outside India and continuous journeys commencing outside India are not taxable in India where the place of embarkation is outside India. Passenger transportation commencing in Kolkata, including a continuous journey from Kolkata to a foreign destination through a short transit stop, is taxable as an intra-State supply with CGST and WBGST at the applicable rates stated in the ruling. Transportation of human remains from outside India to India and vice versa was held not to constitute a supply of services under Clause 4 of Schedule III to the CGST Act.

FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, WEST BENGAL

a. A person within the ambit of Section 100 (1) of theCentral Goods and Services Tax Act, 2017 or West Bengal Goods and Services Tax Act, 2017 (hereinafter collectively called ^„the GST Act‟), if aggrieved by this Ruling, may appeal against it before the West Bengal Appellate Authority for Advance Ruling, constituted under Section 99 of the West Bengal Goods and Services Tax Act, 2017, within a period of thirty days from the date of communication of this Ruling, or within such further time as mentioned in the proviso to Section 100 (2) of the GST Act.

b. Every such appeal shall be filed in accordance with Section 100 (3) of the GST Act and the Rules prescribed there under, and the Regulations prescribed by the West Bengal Authority for Advance Ruling Regulations, 2018.

1.1 At the outset, we would like to make it clear that the provisions of theCentral Goods and Services Tax Act, 2017 (the CGST Act, for short) and theWest Bengal Goods and Services Tax Act, 2017(the WBGST Act, for short) have the same provisions in like manner except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression “GST Act” would mean the CGST Act and the WBGST Act both.

1.2 The applicant, Biman Bangladesh Airlines Limited, is an international air travel company operating exclusively international flights with branch offices in Kolkata, Delhi and Chennai in India and does not provide any domestic flight services within India. The applicant provides international passenger air transportation involving journeys from outside India to India, from India to foreign countries and continuous journeys between India and foreign countries or between two foreign countries with transit stops. In this context, the applicant has sought an advance ruling on the correct GST treatment and liability for such international flight services under different boarding and journey scenarios, including the applicable classification and tax treatment under the relevant place-of-supply provisions of the GST law.

1.3 The applicant has made this application under sub-section (1) of section 97 of the GST Act and the rules made thereunder, seeking an advance ruling in respect of the following questions:

1. What is the correct GST treatment and liability where a passenger boards from outside India and travels to India? (e.g., Dhaka, Bangladesh to Kolkata, India)

2. What is the correct GST treatment and liability where a passenger boards from India and travels to a foreign country? (e.g., Kolkata, India to Dhaka, Bangladesh)

3. What is the correct GST treatment and liability for a passenger on a continuous journey under a single ticket from a foreign country to India? (e.g., London, UK to Kolkata, India with a transit stop in Dhaka, Bangladesh)

4. What is the correct GST treatment and liability for a passenger on a continuous journey under a single ticket from India to a foreign country? (e.g., Kolkata, India to London, UK with a transit stop in Dhaka, Bangladesh)

5. What is the correct GST treatment and liability for a passenger on a continuous journey under a single ticket from one foreign country to another foreign country with a stop in India? (e.g., Dhaka, Bangladesh to London, UK with a transit stop in Kolkata, India)

6. What is the correct GST treatment and liability for transportation of human remains (dead bodies) from outside India to India and vice versa?

1.4 The aforesaid questions on which the advance ruling is sought are found to be covered under clause (c), (e) & (g) of sub-section (2) of section 97 of the GST Act.

1.5 The applicant states that the question raised in the application has neither been decided by nor is pending before any authority under any provision of the GST Act.

1.6 The officer concerned from the Revenue has raised no objection to the admission of the application.

1.7 The application is, therefore, admitted.

2. Submission of the Applicant

2.1 The Applicant, Biman Bangladesh Airlines Limited, is the national airline of Bangladesh. In India, the Applicant operates exclusively as an international airline through its branch offices located in Kolkata, Delhi and Chennai and does not operate any domestic flight services within India. Being engaged in international air transportation involving cross-border passenger movement, the Applicant submits that uncertainty arises regarding the correct GST treatment under the Integrated Goods and Services Tax Act, 2017, the Central Goods and Services Tax Act, 2017 and the West Bengal Goods and Services Tax Act, 2017 in respect of different scenarios of international carriage. The Applicant has therefore approached this Authority seeking determination of the GST treatment and liability applicable to such transactions. Primarily, they raised five questions in their application before the WBAAR. Subsequently, they added another question (Question No. 6) in their written submission before the Authority during the personal hearing.

2.2 The Applicant submits that the determination of the place of supply is fundamental to deciding the taxability of passenger transportation services. Section 12(9) of the IGST Act, 2017 governs the place of supply of passenger transportation services where both the supplier and the recipient of service are located in India. Under the said provision, the place of supply of passenger transportation service is the place where the passenger embarks on the conveyance for a continuous journey.

2.3 The Applicant further refers to Section 13(9) of the IGST Act, 2017 in respect of international services where the supplier or the recipient of service is located outside India. The Applicant submits that under the said provision, the place of supply for services of transportation of passengers shall be the place where the passenger embarks on the conveyance for a journey. Thus, according to the Applicant, the point of embarkation is significant in determining the place of supply and, consequently, the applicability of GST to international passenger transportation.

2.4 The Applicant also refers to the definition of “export of services” contained in Section 2(6) of the IGST Act, 2017 and submits that a supply qualifies as export of services where (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) payment for such service has been received by the supplier in convertible foreign exchange; and (v) the supplier and recipient are not merely establishments of a distinct person.

2.5 The Applicant further refers to Section 2(11) of the IGST Act, 2017 relating to “import of services” and submits that import of services means a supply of service where the supplier is located outside India, the recipient is located in India and the place of supply of such service is in India. The Applicant has also referred to Entry No. 14 ofNotification No. 9/2017-Integrated Tax (Rate) dated 28.06.2017, which provides exemption in respect of specified services by way of transportation of passengers by aircraft. The Applicant contends that services provided by an international airline in respect of passengers embarking from outside India fall outside the charging provisions where the place of supply is outside India and therefore such supplies are not taxable in India.

2.6 The Applicant has furnished the following Service Accounting Codes as relevant to passenger air transportation services:

SAC Code	Description
9964	Passenger transportation services (general)
996421	Passenger air transport services – domestic
996422	Passenger air transport services – international
996423	Passenger charter air transport services

2.7 In respect of the first question, concerning a passenger boarding from outside India and travelling to India, such as Dhaka, Bangladesh to Kolkata, India, the Applicant submits that the place of embarkation is outside India, namely Dhaka, and the service is rendered from a foreign location. Accordingly, the place of supply is outside India, being the place of embarkation. Since the place of supply is outside India, the Applicant contends that the transaction does not fall within the ambit of GST and no IGST, CGST or SGST is leviable in India.

2.8 The Applicant further submits that tickets issued for such journeys are already subject to taxes in Bangladesh, including Embarkation Fee (BD), Travel Tax (UT), Excise Duty Tax (OW), Passenger Security Fee (P8) and VAT on Embarkation Fee (E5), as evidenced by sample tickets filed with the application. According to the Applicant, levy of Indian GST on the same transaction would amount to double taxation of an identical international supply and would be inconsistent with general principles of international taxation. The Applicant states its position for such transactions as follows:

Particulars	Applicant’s submission
GST Liability	NIL (Not taxable in India)
SAC Code	996422 – International passenger air transport services

2.9 In respect of the second question, concerning passengers boarding from India and travelling to a foreign country, such as Kolkata, India to Dhaka, Bangladesh, the Applicant submits that the place of embarkation is within India, namely Kolkata. According to the Applicant, Section 12(9) of the IGST Act, 2017 applies since the supply originates in India through its Indian branch and the place of embarkation is Kolkata. The supply is therefore taxable in India. Since the point of embarkation is in West Bengal, the Applicant considers the supply an intra-State supply attracting CGST and SGST (WBGST) at the applicable rate. The Applicant submits that this position is also consistent with its existing practice, as evidenced by the sample ticket annexed with the application wherein GST of Rs. 1,552/- has been charged on the Kolkata to Dhaka sector. The Applicant states the applicable tax treatment as follows:

Particulars	Applicant’s submission
GST Liability	CGST + SGST (WBGST) applicable
Rate	5% (2.5% CGST + 2.5% SGST) as applicable to passenger air transport services in Economy Class
SAC Code	996422 – International passenger air transport services

2.10 In respect of the third question relating to a continuous journey under a single ticket from a foreign country to India, such as London to Kolkata via Dhaka, the Applicant submits that the passenger holds a single ticket commencing from London or another foreign country, transiting through Dhaka and terminating at Kolkata. In such a case, the first point of embarkation is London, which is outside India. According to the Applicant, no GST is leviable in India on the entire journey covered by the single ticket, notwithstanding the fact that a portion of the journey, namely Dhaka to Kolkata, terminates in India.

Particulars	Applicant’s submission
GST Liability	NIL (Place of supply is outside India)
SAC Code	996422 – International passenger air transport services

2.11 In respect of the fourth question concerning a continuous journey under a single ticket from India to a foreign country, such as Kolkata to London via Dhaka, the Applicant submits that the passenger holds a single ticket commencing from Kolkata, transiting through Dhaka and terminating at London. The first point of embarkation is Kolkata, which is within India. According to the Applicant, Section 12(9) of the IGST Act, 2017 provides that for a continuous journey evidenced by a single ticket, the place of supply is determined with reference to the first point of embarkation, which in this case is Kolkata, West Bengal. The Applicant accordingly submits that the entire journey under the single ticket is treated as a supply made from Kolkata. Since the point of embarkation is situated within West Bengal, according to the Applicant, CGST and SGST would be applicable on the Indian leg, namely Kolkata to Dhaka, while the transaction may qualify as export of services, subject to the ruling of this Authority. The Applicant has classified the service under SAC 996422, namely international passenger air transport services.

2.12 In respect of the fifth question relating to a continuous journey under a single ticket from one foreign country to another foreign country with a transit stop in India, such as Dhaka to London via Kolkata, the Applicant submits that the passenger holds a single ticket from Dhaka to London with Kolkata merely being a transit point. The first point of embarkation is Dhaka, which is outside India, and the passenger does not embark from India. The Applicant submits that by virtue of Section 13(9) of the IGST Act, 2017, the place of supply for such continuous journey is determined on the basis of the first point of embarkation, namely Dhaka. Consequently, according to the Applicant, the place of supply is outside India and the transaction is not taxable under Indian GST laws. The mere fact that the flight touches down at Kolkata in transit does not alter the character of the supply as the passenger does not avail any separate transportation service from India and the Kolkata stop is merely incidental to the continuous international journey covered by the single ticket.

Particulars	Applicant’s submission
GST Liability	NIL (Place of supply is outside India; India is only a transit point)
SAC Code	996422 – International passenger air transport services

2.13 Subsequently, in their written submission, the Applicant raised an additional question regarding transportation of human remains (dead bodies/mortal remains) from outside India to India and vice versa. The Applicant submits that this is a distinct aspect of its international airline operations and requires specific clarification under GST, since it occasionally transports human remains on its international flights. The Applicant contends that transportation of human remains by air is in the nature of a cargo/freight service and not a passenger transportation service. Human remains are transported as “cargo” aboard flights, generally in the cargo hold. Accordingly, the Applicant submits that such service should be classified under transportation of goods by air and not under passenger air transport services.

2.14 For transportation of human remains, the Applicant has furnished the following SAC Codes as applicable:

SAC Code	Description
996531	Air transport services of letters and parcels and other goods
996532	Air transport services of bulk cargo (including human remains where treated as cargo)

2.15 In light of the aforesaid facts and legal provisions, the Applicant has prayed that the Authority determine the correct GST treatment, classification, SAC Code and applicable GST liability in respect of passenger transportation services where the passenger embarks from outside India and travels to India, where the passenger embarks from India and travels to a foreign country, continuous journeys under a single ticket from a foreign country to India, continuous journeys from India to a foreign country, continuous journeys between two foreign countries involving a transit stop in India and transportation of human remains by air from outside India to India and from India to outside India.

3. Submission of the Revenue

3.1 The concerned officer from the Revenue has submitted that the applicant, through its registered branch in West Bengal, is engaged in providing international passenger air transportation services. According to the Revenue, the taxability of such services is required to be determined with reference to the location of the supplier and recipient and the place of supply as prescribed under sections 12 and 13 of the Integrated Goods and Services Tax Act, 2017.

3.2 In respect of a journey where a passenger embarks from a place outside India and travels to India, for example, Dhaka to Kolkata, the Revenue has submitted that the place of supply would be the place where the passenger embarks on the conveyance for a continuous journey in terms of section 13(10) of the IGST Act. Since the place of embarkation in such a case is outside India, the place of supply would also be outside India. The Revenue has treated such supply as an inter-State supply under section 7 of the IGST Act.

3.3 In respect of a journey commencing from India and terminating outside India, for example, Kolkata to Dhaka, the Revenue has submitted that where both the supplier and recipient are located in India, section 12 of the IGST Act would apply. In terms of section 12(9), the place of supply in the case of a registered recipient would be the location of such recipient, whereas in the case of an unregistered recipient, it would be the place where the passenger embarks on the conveyance for a continuous journey. Accordingly, where the place of supply is in West Bengal, the supply would be intra-State and liable to CGST and SGST at the applicable rate.

3.4 The Revenue has further submitted that in the case of a continuous journey under a single ticket from a foreign country to India involving a transit stop, for example, London to Kolkata via Dhaka, the place of supply would be the place where the passenger first embarks for the continuous journey in terms of section 13(10) of the IGST Act. Since such place is outside India, the Revenue has treated the transaction as an inter-State supply and has expressed the view that no GST would be payable thereon.

3.5 Conversely, in the case of a continuous journey under a single ticket commencing in India and terminating outside India with a transit stop, for example, Kolkata to London via Dhaka, the Revenue has submitted that section 12(9) of the IGST Act would apply where both the supplier and recipient are located in India. The place of supply would accordingly be the location of the registered recipient or, in the case of an unregistered recipient, the place of embarkation for the continuous journey. Where such place of supply is in West Bengal, the supply would be treated as an intra-State supply under section 8 of the IGST Act.

3.6 In respect of a continuous journey commencing and terminating outside India but involving a transit stop in India, for example, Dhaka to London via Kolkata, the Revenue has submitted that the place of supply would be the place where the passenger embarks for the continuous journey in terms of section 13(10) of the IGST Act. Since the passenger embarks outside India, the place of supply would be outside India. The Revenue has treated such transactions as inter-State supplies and has expressed the view that no GST would be payable thereon.

4. Observations & Findings of the Authority

4.1 We have gone through the records of the issue as well as submissions made by the authorized representatives of the applicant during personal hearing. We have also considered the submission made by the officer concerned from the revenue.

4.2 As per the facts submitted before us, the applicant is an international air travel company with operations in India through its branch offices in Kolkata, Delhi and Chennai. The applicant operates exclusively international flights and it does not offer any domestic services within India. In other words, the passengers using the applicant‟s flight services either board from India and go to abroad or board from abroad and come to India. Sometimes passengers board flight from outside India and go to destination outside India with a transit stop in India.

4.3 Under these circumstances, the applicant seeks an advance ruling on the correct GST treatment and GST liability for the international flight services provided by him in the following scenarios:

• Passengers boarding from outside India and coming to India (for example, a passenger boards a flight in Dhaka destined for Kolkata)
• Passengers boarding from India for a flight to abroad (for example, a passenger boards a flight in Kolkata destined for Dhaka)
• Passengers on continuous journey with a single ticket from a foreign country to India (for example, a passenger holding a single ticket and making a journey from London to Kolkata with a short transit stop in Dhaka)
• Passengers on continuous journey with a single ticket from India to a foreign country (for example, a passenger holding a single ticket and making a journey from Kolkata to London with a short transit stop in Dhaka)
• Passengers on continuous journey with a single ticket from a foreign country to another foreign country with a stop in India (for example, a passenger holding a single ticket and making a journey from Dhaka to London with a short transit stop in Kolkata)

During the course of personal hearing, the applicant’s representative placed another question before this authority. The question is as under:

• What is the correct GST treatment and liability of tax for transportation of human remains (dead bodies) from outside India to India and vice versa?

All the above questions appear to be covered by Section 97(2) of the CGST Act, 2017 and are admitted.

4.4 The Revenue has given its submission in detail. The submission of the Revenue can be summarized as under (case-wise):

1. Passengers boarding from outside India and coming to India

Example: Dhaka (DAC) – Kolkata (CCU)

• • Supplier’s Location: West Bengal, India
  • Recipient’s Location: Outside India (Dhaka, Bangladesh)
  • Place of Supply: Section 13(10) of the IGST Act – Place where the passenger embarks for the continuous journey e. Dhaka (outside India).
  • Nature of Supply: Inter-State supply under Section 7 of the IGST Act.
  • Passengers boarding from India for a flight to abroad

2. Example: Kolkata (CCU) – Dhaka (DAC)

• • Supplier’s Location: West Bengal, India
  • Recipient’s Location: India
  • Since both supplier and recipient are located in India, Section 12 of the IGST Act is applicable.
  • Place of Supply:
  • If the passenger is a registered person – Location of such registered recipient [Section 12(9)(a)].
  • If the passenger is an unregistered person – Place where the passenger embarks e. Kolkata, West Bengal [Section 12(9)(b)].
  • Nature of Supply: Intra-State supply under Section 8 of the IGST Act (supplier and place of supply both in West Bengal).
  • GST Liability: CGST + SGST at the applicable rate.

3. Passengers on continuous journey with single ticket: Foreign country – India (with transit stop in Dhaka)

Example: London (LHR) – Dhaka (transit) – Kolkata (CCU)

• • Place of Supply: Section 13(10) – Place where the passenger embarks for the continuous journey e. London (outside India).
  • Nature of Supply: Inter-State supply under Section 7 of the IGST Act.
  • GST Liability: No GST is levied

4. Passengers on continuous journey with single ticket: India – Foreign country (with transit stop in Dhaka)

Example: Kolkata (CCU) – Dhaka (transit) – London (LHR)

• • Supplier’s Location: West Bengal, India
  • Recipient’s Location: India
  • Since both supplier and recipient are located in India, Section 12 of the IGST Act applies.
  • Place of Supply:
  • Registered passenger – Location of recipient [Section 12(9)(a)].
  • Unregistered passenger – Place of embarkation e. Kolkata, West Bengal [Section 12(9)(b)].
  • Nature of Supply: Intra-State supply under Section 8 of the IGST Act.
  • GST Liability: CGST + SGST at the applicable rate.

5. Passengers on continuous journey: Foreign country – foreign country with stop in India

Example: Dhaka (DAC) – Kolkata (transit) – London (LHR)

• • Place of Supply: Section 13(10) – Place where the passenger embarks for the continuous journey i.e. Dhaka (outside India).
  • Nature of Supply: Inter-State supply under Section 7 of the IGST Act.
  • GST Liability: No GST is levied

4.5 The Applicant is of the opinion that the SAC for the passenger services referred to in the application is 996422. They have provided two SACs for the last service of transporting human remains, viz. 996531 and 996532. The opinion of the applicant regarding the issues raised in the application can be summarised as under:

INCIDENT	PLACE OF SUPPLY	TAXABILITY UNDER GST	TAX RATE
Passengers  boarding from outside India (Dhaka) and coming to India (Kolkata)	Outside India	No	Not applicable
Passengers boarding from India (Kolkata) for a flight to abroad (Dhaka)	Kolkata	Yes	2.5% CGST + 2.5% SGST
Passengers on continuous journey with a single ticket from a foreign country to India (Kolkata) with a transit stop in Dhaka	Outside India	No	Not applicable
Passengers on continuous journey with a single ticket from India (Kolkata) to a foreign country (London) with a transit stop in Dhaka	Kolkata	Yes	2.5% CGST + 2.5% SGST
Passengers on continuous journey with a single ticket from a foreign country (Dhaka) to another foreign country (London) with a stop in India (Kolkata)	Outside India	No	Not applicable
Transportation of human       remains (dead body) from outside India to India and vice versa	No clear opinion

4.6 As per our understanding, the underlying issues in all the circumstances referred to in the present application for advance ruling are the place of supply and liability of the applicant to pay tax for each circumstance under the GST regime. In all the cases except the last one i.e. transportation of human remains, are related to transportation of passengers. So, our discussion will encompass these two issues viz. place of supply and liability of tax of the circumstances raised in the application under the provisions of the GST Acts. Before going into the discussion, let us clarify certain issues and concepts which are integrally related to the questions raised in the application.

Embarkation: This term finds reference in Section 12(9) of the Integrated Goods and Services Tax Act, 2017 (in short, the IGST Act, 2017). This term has not been defined in the Act. However, in the context of air transport of passengers, the term embarkation refers to the process of passengers getting onto an aircraft in order to start a journey. Legally, the embarkation process begins the moment a passenger enters the immediate airport areas dedicated to the flight (such as passing through the gate area) and concludes once he is safely inside the aircraft.

Disembarkation: This term finds reference in the explanation to Section 2(3) of the IGST Act, 2017. Here also, the term has not been defined in the Act. Conceptually, it is just the opposite of embarkation. In respect of air transport of passengers, it is the formal term for the process of passengers and crew leaving an aircraft after a flight lands, and it covers the entire journey from the moment the plane parks and the doors open to when passengers step into the airport terminal.

Continuous journey: This term has been defined in Section 2(3) of the IGST Act, 2017 as under:

“continuous journey” means a journey for which a single or more than one ticket or invoice is issued at the same time, either by a single supplier of service or through an agent acting on behalf of more than one supplier of service, and which involves no stopover between any of the legs of the journey for which one or more separate tickets or invoices are issued.

From the above definition, the following points emerge in the context of air transport of passengers:

i.  A continuous journey may be covered by a single ticket or invoice issued by a single supplier of service

ii. It may be covered by more than one ticket or invoice issued at the same time by an agent acting on behalf of more than one supplier of service

iii. It does not involve a stopover between any of the legs of the journey for which one or more separate tickets or invoices are issued

Stopover: This term has been defined in the explanation clause to Section 2(3) of the IGST Act, 2017. The relevant portion is reproduced as under:

Explanation.––For the purposes of this clause, the term “stopover” means a place where a passenger can disembark either to transfer to another conveyance or break his journey for a certain period in order to resume it at a later point of time;

From the above definition, the following points emerge in the context of air transport of passengers:

i. Stopover refers to a place where a passenger disembarks

ii. This disembarkation may be for transfer to another aircraft

iii. It may be for a break in journey for a certain period in order to resume it at a later point of time

Transit stop: The applicant has used this term in several occasions in his application. The GST Act does not define the term. However, in the context of air transport of passengers, a transit stop is an intermediate landing where the aircraft briefly stops to refuel, pick up new passengers, or drop off existing ones. Passengers continuing to the final destination either remain on the same aircraft or wait in a transit area before continuing the journey.

Conceptually, ^„stopover‟ and ^„transit stop‟ are not the same thing so far as air transport of passengers is concerned. Usually, a transit stop lasts an hour or two, while a stopover involves 24 hours or longer. In a transit stop, passengers fly on the same aircraft from the point of embarkation to the final destination, with the aircraft briefly stopping in between to refuel, pick up new passengers, or drop off existing ones. In a stopover, however, there is a change of aircraft, and there may even be a change of airlines. Luggage of the passenger remains on the same aircraft in respect of a transit stop. In case of a stopover, luggage is either to be collected by the passenger or transshipped to a new aircraft. During a transit stop, the passenger stays in the transit area of the airport and is not permitted to leave the airport; in the case of a stopover, the passenger is permitted to leave the airport, subject to the visa policies of the respective country.

In our considered view, transit stop for a short time span should not be equated with stopover. As per the definition of continuous journey under Section 2(3) of the IGST Act, 2017 ibid, journey cannot be considered as a continuous one if there is a stopover between any legs of the journey. This essentially means that a stopover breaks the continuity of a journey undertaken by a passenger. A short transit stop, however, does not break the continuity of a journey from the point of embarkation to the point of destination. In such a transit stop, there is no change of aircraft, airlines or transshipment of luggage, etc.

4.7 The services detailed under the application for advance ruling, except the last one [i.e. transportation of human remains (dead bodies)], relate to transportation of passengers by air. The service heading number is 9964, i.e., passenger transportation service. Air transport services of passengers can be of two types:

A. Scheduled air transport services of passengers: It is a commercial aviation system featuring regular, public flights operated according to published timetables between specific locations.

B. Non-scheduled air transport services of passengers: These are commercial flights that do not run on a fixed, published public timetable. Instead, they operate on a charter, on-demand, or ad hoc basis for a fee.

The applicant is an airline company which offers a commercial aviation system featuring regular, public flights operated according to published timetables between specific locations. So services provided by the applicant should be regarded as scheduled air transport service. The specific service code is 996425, which stands for Domestic/ International Scheduled Air transport services of passengers. Transportation of human remains and dead bodies falls under heading number 9997, i.e., other services, and the specific heading number is 99973, which stands for Funeral, cremation and undertaking services.

4.8 Now we will move to the legal provisions in the GST Acts in respect of passenger transportation service. The IGST Act, 2017 has express provisions regarding the place of supply of this particular service under Section 12(9) where the location of the supplier and the recipient is in India and under Section 13(10) where the location of the supplier or the location of the recipient is outside India.

The relevant provisions of Sections 12 and 13 are reproduced as under:

12. (1) The provisions of this section shall apply to determine the place of supply of services where the location of supplier of services and the location of the recipient of services is in India.

(2)The place of supply of services, except the services specified in sub-sections (3) to (14),––

a. made to a registered person shall be the location of such person;

b. made to any person other than a registered person shall be,–

i. the location of the recipient where the address on record exists; and

ii. the location of the supplier of services in other cases.

(3) *********************

(4) *********************

(5) *********************

(6) *********************

(7) *********************

(8) *********************

(9) The place of supply of passenger transportation service to,—

a. a registered person, shall be the location of such person;

b. a person other than a registered person, shall be the place where the passenger embarks on the conveyance for a continuous journey:

Provided that where the right to passage is given for future use and the point of embarkation is not known at the time of issue of right to passage, the place of supply of such service shall be determined in accordance with the provisions of sub-section (2).

Explanation.––For the purposes of this sub-section, the return journey shall be treated as a separate journey, even if the right to passage for onward and return journey is issued at the same time.

13 (1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India.

(2) *****************

3. *****************

4. *****************

5. *****************

6. *****************

7. *****************

8. *****************

9. ****************

10. The place of supply in respect of passenger transportation services shall be the place where the passenger embarks on the conveyance for a continuous journey.

4.9 Keeping in consideration whatever we discussed in Paragraph 4.6 and 4.7 supra, we will now deal with each of the circumstances stated in the application in order to determine the place of supply and taxability of the respective circumstance. Here, the basic assumptions are that there is no ticket or invoice indicating a return journey in all the circumstances, and the recipient of the service in each case is a person other than a registered person, as intimated by the applicant.

Passengers boarding from outside India and coming to India

The applicant has elaborated that in this scenario the passenger boards a flight from Dhaka and the flight is destined to Kolkata. Here the location of the recipient of service is clearly outside India, and the place of embarkation is also outside India. Under Section 13(10) of the IGST Act, 2017, the place of supply is outside India. If the ticket or invoice refers to this journey only, i.e., there is no return journey from Kolkata to Dhaka, the provisions of the GST Acts will not apply in this case. Hence, no tax is to be charged under the CGST Act, 2017.

Passengers boarding from India for a flight to abroad

Here the case is that the passenger boards a Dhaka-bound flight from Kolkata. Clearly, the location of the supplier (the applicant) and the recipient (the passenger) of the service is in West Bengal, India, and the place of embarkation is also in West Bengal, India. As per the provisions of Section 12(9) of the IGST Act, 2017, the place of supply is the location from where the passenger embarks on the aircraft, i.e. Kolkata. Since the location of the supplier and the place of supply of services are in the same state, it will be treated as an intra-state supply as per the provisions of section 8(2) of the IGST Act, 2017, and accordingly CGST and WBGST at the appropriate rate will be applied in this case. To determine the tax to be charged in the above case, we refer toNotification No. 11/2017- Central Tax (Rate) dated 28.06.2017, as amended. The tax rate in this case will be as under:

A. 5% CGST + 2.5% SGST under item no. (iii) of serial no. 8 of the table in Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 as amended on the condition that credit of input tax charged on goods used in supplying the service has not been taken, as explained in Explanation no. (iv) of the notification ibid in case the passenger travels in economy class

B. 9% CGST + 9% SGST under item no. (v) of serial no. 8 of the table in Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 as amended in case the passenger travels in any class other than economy class

Passengers on continuous journey with a single ticket from a foreign country to  India with a transit stop in Dhaka

Here the illustration is that the passenger boards the Applicant’s flight at London. The flight is bound for Kolkata with a transit stop at Dhaka. The applicant’s representative submits that this transit stop is for only a few hours. In our considered view, this transit stop in no way breaks the continuity of the journey that the passenger has undertaken from London to Kolkata and hence it cannot be equated with stopover as defined in the explanation clause to Section 2(3) of the IGST Act, 2017. It should be regarded as a continuous journey. Here, the location of both the supplier and the recipient is London, which is outside the taxable territory of India. As per the provisions of Section 13(10) of the IGST Act, 2017 the place of supply here is the place of embarkation i.e. London. If there is no return journey, the provisions of the GST Act will not be applicable in this case.

Passengers on continuous journey with a single ticket from India to a foreign country with a transit stop in Dhaka

The Applicant has elaborated that in this case the passenger boards a London-bound flight from Kolkata and there will be a short transit stop at Dhaka. The applicant’s representative submits that this transit stop is for a few hours only. Accordingly, this transit stop does not break the continuity of the journey undertaken by the passenger from Kolkata to London. In our considered view, this transit stop cannot be equated with a stopover as defined in the explanation clause to Section 2(3) of the IGST Act, 2017. It is to be regarded as a continuous journey.

Clearly, the location of the supplier (the applicant) and recipient (the passenger) of service here is in West Bengal, India, and the place of embarkation is also in West Bengal, India. As per the provisions of Section 12(9), the place of supply is the location from where the passenger embarks on the aircraft i.e. Kolkata. Since the location of the supplier and the place of supply of services are in the same state, it will be treated as an intra-state supply under Section 8(2) of the IGST Act, 2017. Accordingly, CGST and WBGST at the appropriate rate will apply in this case.

The tax rate in this case will be as under:

A. 5% CGST + 2.5% SGST under item no. (iii) of serial no. 8 of the table in Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017, as amended on the condition that credit of input tax charged on goods used in supplying the service has not been taken, as explained in Explanation no. (iv) of the notification ibid in case the passenger travels in economy class

B. 9% CGST + 9% SGST under item no. (v) of serial no. 8 of the table in Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017, as amended in case the passenger travels in any class other than economy class

Passengers on continuous journey with a single ticket from a foreign country to  another foreign country with a stop in India

In this case, the passenger begins the journey from Dhaka, and his destination is London. In between, there is a short transit stop at Kolkata. The applicant‟s representative submits that this transit stop is for only a few hours. In our considered view, this transit stop in no way breaks the continuity of the journey that the passenger has undertaken from Dhaka to London via Kolkata. Here, the location of both the supplier and the recipient is outside India. Under Section 13(10) of the IGST Act, 2017, the place of supply is the place of embarkation, i.e., Dhaka, which is outside India’s taxable territory, and the provisions of the GST Act will not apply in this case.

Transportation of human remains (dead body) from outside India to India and vice versa

This is a distinct and occasional service that the airline companies offer. As an international carrier, the Applicant, too, occasionally transports human remains (dead bodies/ mortal remains). We all know that under the provisions of the GST Act, supply is the taxable event on which GST is imposed. Before dealing with the question placed by the Applicant let us see whether the referred service can be treated as supply under the GST laws.

Section 7 of the CGST Act, 2017 defines the scope of supply. Sub-section (1) of this section is reproduced as under:

(1) For the purposes of this Act, the expression ―supply‖ includes—

a. all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;

(aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice versa, for cash, deferred payment or other valuable consideration.

Explanation.– For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another;

b. import of services for a consideration whether or not in the course or furtherance of business and;

c. the activities specified in Schedule I, made or agreed to be made without a consideration;

We should read the above sub-section with reference to sub-section (2) which is a non obstante clause. This sub-section reads as under:

(2) Notwithstanding anything contained in sub-section (1),—

a. activities or transactions specified in Schedule III; or

b. such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council, shall be treated neither as a supply of goods nor a supply of services.

Schedule III appended to the CGST Act, 2017 specifies ^„Activities or transactions which shall be treated neither as a supply of goods nor a supply of services‟. Clause 4 of this Schedule refers to ^„Services of funeral, burial, crematorium or mortuary including transportation of the deceased‟. The services mentioned in Clause 4 are all related to the services offered to a person after he/she passes away. It inter alia includes transportation of the deceased. Since transportation of the deceased is neither a supply of goods nor a supply of services, it does not come under the ambit of Section 7(1) of the CGST Act, 2017 and hence there is no question of any tax being imposed on such services.

In view of the foregoing, we rule as under:

SL. NO.	INCIDENT	PLACE OF SUPPLY	TAXABILITY UNDER GST	TAX RATE
1	Passengers boarding from outside India (Dhaka) and coming to India (Kolkata)	Outside India	No	Not applicable
2	Passengers boarding from India (Kolkata) for a flight to abroad (Dhaka)	Kolkata	Yes	2.5% SGST + 2.5% CGST if passenger travels in econmoy class and supplier does not avail corresponding ITC
				9% SGST + 9% CGST if passenger travels in any class other than econmoy class
3	Passengers on continuous journey with a single ticket from a foreign country to India with a transit stop in Dhaka	Outside India	No	Not applicable
4	Passengers on continuous journey with a single ticket from India (Kolkata) to a foreign country	Kolkata	Yes	2.5% SGST + 2.5% CGST if passenger travels in econmoy class and supplier does not avail corresponding ITC
				9% SGST + 9% CGST if passenger travels in any class other than econmoy class
5	Passengers on continuous journey with a single ticket from a foreign country (Dhaka) to another foreign country (London) with a stop in India	Outside India	No	Not applicable
6	Transportation of human remains (dead body) from outside India to India and vice versa	Not a supply of services under clause 4 of Schedule III appended to the CGST Act, 2017