Airbus India liable to 18 pc GST for ‘intermediary services’ of overseas arm

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.

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 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..”