TaxTMI 
TaxTMI 
2026 (9) TMI 1734
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....') in India, as per the terms of the scope agreed between Airbus Defence and Space S.A. and the IAC, and delivered, ex-works at IAC's facility in India. (iii) The Aircraft Contract consists of delivery of aircraft, role equipment, manufacture of the recommended list of spares, ground support equipment, ground handling equipment, special test equipment, and training services and provision of technical literature. (iv) The delivery of all aircrafts is scheduled to be completed within 120 months from the effective date of the contract. (v) Under the C-295 programme, Tata Advanced Systems Ltd. ('TASL') has been appointed as the IAC (Indian Aircraft Contractor to the Government of India) for the manufacture and supply of the forty aircrafts (i.e. make in India component). Correspondingly, a contract dated 29.10.2021 (hereinafter 'IAC Contract') has been entered into between Airbus Defence and Space S.A. and TASL for the manufacture of the forty aircrafts and all other equipment to be onward supplied by Airbus Defence and Space S.A. to the Ministry of Defence (MoD). 2. Further, in the context of this application, some of the relevant clauses of the Aircraft ....
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....tains TASL's GST number. The contract price does not include any taxes, customs duty to be paid in India or abroad. (d) In other words, the prices are exclusive of taxes - All taxes, duties, levies and charges which are to be paid for the delivery of supplies under the contract, shall be paid by the parties in their respective countries. (e) TASL undertakes to meet such requirements as a professional expert in all aspects of the development, production, manufacture, supply and support of the aircrafts. (f) Aircrafts shall be delivered ex-works at TASL's delivery centre facilities in India. (g) Title and risk of the aircraft will transfer to Airbus Defence and Space S.A. upon signature of the Acceptance Certificate. (h) The total consideration payable under the IAC Contract consists of Euro 57.92 Mn., USD 67.86 Mn. and INR 19415.00 Mn. 4. The applicant has further submitted that TASL has set up the Final Assembly Line ('FAL') in Vadodara, Gujarat for manufacture of the forty aircrafts (C-295W), and the FAL became fully operational in the month of October 2024. TASL is registered for GST in the State of Gujarat (GSTIN 24AACCT5245K1Z9). ....
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....rvices will be procured by TASL in India, domestically and from outside India. • Airbus Defence and Space S.A. has set up a Project Office (i.e. applicant) in Haryana, India with the permission of the AD Bank to fulfil its obligations under the Aircraft contract. • The applicant, in order to fulfil its contractual obligations under the Aircraft Contract shall make an ex-works inward supply (procurement) of the aircrafts from the IAC in Vadodara, and thereafter, deliver these aircrafts (outward supply), ex-works in Vadodara, Gujarat to the MoD. • The procurement of the aircrafts and the associated equipment will take place in India in Gujarat and thereafter be supplied to the MoD in India in Gujarat. • In a nutshell, it is submitted that the C-295 is a product of the applicant-entity and pursuant to the platform contract, akin to a manufacturer-trader, it has outsourced the production activity to TASL (in the context of C-295 programme in India), and whereby it shall procure the aircrafts from TASL and supply it to MOD as per the platform contract. • It has been indicated by TASL (the IAC) that it shall apply GST @ 5% ....
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....and is in the process of obtaining an office space in Gujarat. • As per Explanation to Section 8, which is applicable to the entire Integrated Goods and Services Tax Act, 2017, Airbus Defence and Space S.A. and its Project Office in India shall be regarded as 'distinct persons'. • The relevant extract of the Explanation is as follows: "Explanation 1.- For the purposes of this Act, where a person has,- (i) an establishment in India and any other establishment outside India; (ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or (iii) an establishment in a State or Union territory and any other establishment registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons. Explanation 2.- A person carrying on a business through a branch or an agency or a representational office in any territory shall be treated as having an establishment in that territory." • Applicant has entered contract with TASL for manufacture and supply of the forty aircrafts. It has also entered con....
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....from where the taxable supply of goods or services are made and the aggregate turnover exceeds Rs. 20 lakhs. • In the present case, the supply of forty aircrafts will be made from Gujarat and the threshold of Rs. 20 lakhs will be exceeded, accordingly, the applicant is liable to obtain the GST registration in Gujarat (the location where the supply is made) and pay intra-state tax in the State of Gujarat. • Further, under the GST law, the supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering India shall neither be regarded as supply of goods nor as supply of services. Thus, the law itself recognizes that where there is out and out movement of goods, such transactions are not liable to GST and accordingly, specifically excluded from 'supply'. • In the present case, forty aircrafts are manufactured in India by TASL and are sold in India to the applicant in India i.e. within the taxable territory, and the subsequent sale to the MoD is also in India. Therefore, such transactions for supply of forty aircrafts are taxable in India. • The supplies made by TASL t....
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....ks at Airbus Defence and Space S.A. facilities in Spain in flyaway condition and the remaining forty aircrafts shall be manufactured in India by an Indian Aircraft Contractor to the Government of India ('IAC') (under the C-295 programme) in India i.e. Tata Advanced Systems Ltd. ('TASL') as per the terms of the scope agreed between Airbus Defence and Space S.A. and the IAC, and delivered, ex-works at IAC's facility in India; that the delivery of all aircrafts is scheduled to be completed within 120 months from the effective date of the contract; that correspondingly, a contract dated 29.10.2021 ('IAC Contract') has been entered into between Airbus Defence and Space S.A. and TASL for the manufacture of the forty aircrafts and all other equipment to be onward supplied by Airbus Defence and Space S.A. to the Ministry of Defence (MoD). 10.1 The applicant has further submitted that TASL has set up the Final Assembly Line ('FAL') in Vadodara, Gujarat for manufacture of the forty aircrafts (C-295W), and the FAL became fully operational in the month of October 2024; that TASL is registered for GST in the State of Gujarat (GSTIN 24AACCT5245K1Z9) and in order to fulfil the obligations unde....
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....nts 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; (d) **** (1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II. (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....
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....Defence (MoD) (which is being manufactured by M/s. Tata Advance Systems ltd. (who is registered in Vadodara, Gujarat and has been appointed as the IAC by the MoD)) and will be delivered ex-works (outward supply) to the MoD by the applicant at Vadodara in Gujarat. The applicant, in order to fulfil its contractual obligations under the Aircraft Contract shall make an ex-works inward supply (procurement) of the aircrafts from the IAC in Vadodara, and thereafter, deliver these aircrafts (outward supply), ex-works in Vadodara, Gujarat to the MoD. The aircrafts fall under the definition of 'goods' as defined in Section 2(52) of the CGST Act, 2017. As per the contract, there is a consideration payable by MoD to the applicant for the transaction of supply of aircrafts made to them by the applicant which is in the course or furtherance of the business of the applicant. Further, as per the applicant's submission, title and ownership in respect of these forty aircrafts manufactured in India shall be transferred to the applicant at IAC's facility in Gujarat, upon signature of Acceptance Certificate and it shall be deemed that the aircrafts have been thereafter accepted by the MoD and that the ....
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....category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees: Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees. Provided further that the Government may, at the request of a special category State and on the recommendations of the Council, enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees and subject to such conditions and limitations, as may be so notified. Provided also that the Government may, at the request of a State and on the recommendations of the Council, enhance the aggregate turnover from twenty lakh rupees to such amount not exceeding forty lakh rupees in case of supplier who is engaged exclusively in the supply of goods, subject to such conditions and limitations, as may be notified. Explanation.- For the purposes of this sub-section, a person shall be considered to be engaged e....
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.... thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed: Provided that a casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business. Provided further that a person having a unit, as defined in the Special Economic Zones Act, 2005, in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the same State or Union territory. Explanation.- Every person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate baseline is located. (2) A person seeking registration under this Act shall be granted a single registration in a State or Union territory: Provided that a person having multiple places of business in a State or Union territory may be granted a separate registration for each such place of business, subject to such conditions as may be pr....
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....t may, on the recommendations of the Council, specify in the said notification. (6C) On and from the date of notification, every person, other than an individual, shall, in order to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number of the Karta, Managing Director, whole time Director, such number of partners, Members of Managing Committee of Association, Board of Trustees, authorised representative, authorised signatory and such other class of persons, in such manner, as the Government may, on the recommendation of the Council, specify in the said notification: Provided that where such person or class of persons have not been assigned the Aadhaar Number, such person or class of persons shall be offered alternate and viable means of identification in such manner as the Government may, on the recommendations of the Council, specify in the said notification. (6D) The provisions of sub-section (6A) or sub-section (6B) or sub-section (6C) shall not apply to such person or class of persons or any State or Union territory or part thereof, as the Government may, on the recommendations of the Council, s....