Classification of service— In the instant case, the applicant has sought advance ruling in respect of the following questions:-

i. Whether the services provided by the company to its parent company relating to the test benches which are in the name of MRO services, be classified under heading “9987 i(a): Maintenance, Repair or Overhaul services in respect of aircrafts, aircraft engines and other aircraft components or parts”?

ii. If the answer to the above is in affirmation, then whether the Place of supply is the “location of the recipient” as per the Notification No. 02/2020-Integrated Tax dated 26th March 2020 which is the location of the Parent Company (Outside India) and that can be construed as exports of services?

iii. If the answer to the first question is in negation, then we would like to know the classification of the services provided to the parent company and can it be considered as exports of services?

The Applicant, a wholly owned subsidiary of M/s Spherea Test Services, a joint stock company of France (herein after referred to as Parent company). The Parent Company sold two equipments i.e test benches for aeronautics cases are to their customer in India and these test benches are currently with Indian Air Force (IAF) at their operational forward bases. These test benches are used to test and prove the airworthiness of the aircraft's equipment. The test benches also, on detection of any errors, are used for determination and correction of the errors which will ensure the safe flight of these aircraft.

The parent company has entered into an agreement to provide a set of services with a customer in France, who in turn has entered into an agreement to provide such set of services to a customer in India.

Held that— i. The services provided by the Applicant to its parent company relating to the test benches are not classifiable under 'Maintenance, repair or overhaul services in respect of aircrafts, aircraft engines and other aircraft components or parts' and hence not covered under Sl.no. 25 (ia) of the Notification No. 11/2017-Central Tax (Rate), dated: 26.06.2017, as amended.

ii. No Advance ruling is given on this issue as the first question is answered in negative.

iii. The classification of services provided to parent company is 'maintenance and repair services of other machinery and equipment' under SAC 998719. On the question as to whether it can be considered as export of services, ruling cannot be given as it involves the determination of place of supply, which is outside the jurisdiction of this Authority.