CBEC issues circular for clarification on supply of satellite launch services

Clarification on supply of satellite launch services by ANTRIX Corporation Ltd vide IGST circular no. 2/1/2017 dated 27th September,2017

Circular No. 2/1/2017-IGST

F. No. 354/173/2017-TRU
Government of India
Ministry of Finance
Department of Revenue
Tax research Unit
****

North Block, New Delhi27th September 2017

To,

The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners /Commissioner of Central Tax (All)/The Principal Director Generals/Director Generals (All)

Madam/Sir,

Subject: Clarification on supply of satellite launch services by ANTRIX Corporation Ltd -regarding.

1. Request has been received regarding taxability of satellite launch services provided toboth international and domestic customers by ANTRIX Corporation Limited which is awholly owned Government of India Company under the administrative control of Departmentof Space (DOS).

2. In the above context, the legal provisions in GST laws are as under:

a) Export of services is defined in IGST Act in Section 2(6) where the following 5conditions have been prescribed as necessary for a supply to qualify as export of service:

(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) the payment for such service has been received by the supplier of service inconvertible foreign exchange; and
(v) the supplier of service and the recipient of service are not merely establishmentsof a distinct person in accordance with Explanation 1 in section 8;

One of the five conditions for a supply of service to be considered as export of serviceis that the place of supply of service is outside India.

b) Section 13(9) of the IGST Act provides that where location of supplier of services orlocation of recipient of services is outside India, the place of supply of services oftransportation of goods, other than by way of mail or courier, shall be the place ofdestination of such goods. However, where location of supplier and recipient of servicesis in India, then the place of supply is governed by section 12 (8) of the IGST Act, whichstipulates that place of supply will be the location of the recipient of services providedCircular No. 2/1/2017-IGSThe is registered; if not registered, then the place of supply will be the place where goodsare handed over for their transportation.

3. In view of the above, place of supply of satellite launch services supplied by ANTRIXCorporation Limited to international customers would be outside India in terms of section13(9) of IGST Act, 2017 and such supply which meets the requirements of section 2(6) ofIGST Act, thus constitutes export of service and shall be zero rated in accordance with section16 of the IGST Act. Where satellite launch service is provided by ANTRIX CorporationLimited to a person located in India, the place of supply of satellite launch service would begoverned by section 12 (8) of the IGST Act and would be taxable under CGST Act, UTGSTAct or IGST Act, as the case may be.

4. Difficulty if any, in the implementation of the circular should be brought to the noticeof the Board. Hindi version would follow.

Yours Faithfully,

Rachna
Technical Officer (TRU)

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• Download the official IGST Circular -2 released by CBEC on 27th September,2017