In re Agneet Sky Aviation (IFSC) Private Limited (GST AAR Gujarat)
Issue and Applicant’s Position
M/s. Agneet Sky Aviation (IFSC) Private Limited, a Special Economic Zone (SEZ) unit registered under GST, sought an Advance Ruling from the Gujarat Authority for Advance Ruling (AAR) regarding the classification and applicable Goods and Services Tax (GST) rate for its business of dry leasing aircraft and helicopters to customers. A dry lease is defined as an agreement where the lessor provides only the aircraft, and the lessee is fully responsible for all operational aspects, including crew, maintenance, and insurance. This arrangement is considered the renting of a bare plane.
The applicant primarily contended that the dry leasing of aircraft/helicopters, being the transfer of the right to use goods (aircrafts being movable property/goods), should be classified under HSN 9973 (Leasing or rental services without operator) and specifically fall under Serial No. 17(iii) of Notification No. 11/2017-CT(R), as amended. This entry prescribes the GST rate to be the “same rate of central tax as on supply of like goods involving transfer of title in goods.” Since helicopters not for personal use attract a 5% GST rate (Sr. No. 244 of Notification No. 1/2017-CT(R)), the applicant argued that the service should also be taxed at 5% IGST (as the applicant is an SEZ unit and the supply would be an inter-state supply to a Domestic Tariff Area (DTA) unit).
