Case Law Details
In re Airbus Group India Private Limited (GST AAR Karnataka)
Whether the activities proposed to be carried out in India by the Applicant would constitute as a supply of ‘Other professional, technical and business services’ falling under HSN code 9983 or as ‘Intermediary service’ classifiable under HSN code 9961/9962 or any other classification of services as specified under the Tariff entries of rate notification issued under Goods and Services Tax law?
We observe that the applicant is of the opinion that the activities undertaken by them are classifiable under Heading 9983 with description of ‘Other professional, technical and business services’. As per the explanatory notes to the scheme of classification of services, heading 998399 offers the same description. This heading includes specialty design services including interior design, design originals, scientific and technical consulting services, original compilation of facts/ information services, translation services, trademark services and drafting services. It is clearly evident from para 7 above and from the contract agreement that the applicant does not deal with the activities mentioned in the HSN 998399.
Also Read: AAAR Ruling : Services by ‘Airbus Group India’ are ‘Intermediary service’ & liable to GST: AAAR
Now, we proceed to examine whether the activities undertaken by the applicant can be called intermediary services. Intermediary is defined, under Section 2(13) of IGST Act, 2017, as a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account. In this regard, we notice that the applicant has emphasized upon not being an agent or a broker. We notice that there can be difference between agent, broker and an intermediary. Whereas in the case of an agent or broker, activity is undertaken on another’s behalf which is not necessary in the case of an intermediary. Therefore, the reliance on principal to principal relationship or calling oneself as an independent contractor is not relevant for the purpose of determining an intermediary as per the definition. An intermediary will merely facilitate or arrange the supply of goods or services between two or more people but will not be providing such supplies on his own account. Here, the word, ‘such’ is of paramount importance. ‘Such’ goods in the present case are the raw materials supplied by the vendors to Airbus Invest SAS, France.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
