Wednesday, July 07, 2021

Airbus India liable to 18% GST on 'intermediary services' to overseas holding firm

Airbus India's technical advisory and procurement services for its France-based holding company are 'intermediary services' and liable to 18 per cent GST, Authority for Advance Ruling has said.

Airbus Group India had approached the Karnataka bench of the AAR, seeking a ruling on whether the services rendered by it to its holding company Airbus Invest SAS, France, would qualify as 'export of service' under Goods and Services Tax (GST) law and hence construed as a 'zero-rated supply'.

The applicant -- Airbus Group India Pvt Ltd -- is a subsidiary of Airbus Invest SAS, France, (Holding company) and its ultimate holding company is Airbus, SE Netherland.

Airbus India was established as a regional entity for performing services that include - procuring raw materials, assessing quality and risk evaluation, receiving a quotation from suppliers and sharing it with holding company, reviewing deadline of production, audit of the procurement process, report un-ethical suppliers' practices.

To the applicant's question as to whether such a supply would constitute as a supply of 'other professional, technical and business services, the Karnataka AAR ruled that Airbus India is an 'intermediary', providing services of the procurement operations for Airbus, France. Hence it would come under 'intermediary services' for the purpose of levy of GST.

"The services rendered by the applicant do not qualify as export of services....and consequently are exigible to GST at the rate of 18 per cent...," the AAR said.

07/07/21 PTI/Economic Times

To Read the News in full at Source, Click the Headline


Post a Comment