Charges for upkeep of airplanes recovered by HO from branches qualify as supply of administration, available under GST

  • GST
  • Case Law
  • High Court
  • knowledge
  • financeseva

Fact of the Case 

  • The applicant company was involved in the provision of scheduled passenger transport services by air and cargo services for transport of goods by air.
  • The Head Office (HO) of the Company located in the State of Haryana and aircrafts in running condition were used by all the Branch Offices (BO).
  • The HO entered into agreement with BOs for carrying out preventive and routine maintenance of aircrafts. It filed an application for advance ruling to determine whether charges in lieu of maintenance services recovered by the HO from the BO shall qualify as supply of service by the HO to BO.


  • The Authority for Advance Ruling observed that the applicant HO entered into an exclusive agreement with its BO’s for providing preventive and routine maintenance.
  • The applicant was providing maintenance services, supply of spare parts for a consideration during or furtherance of business and hence the supply amounts to “supply” under Section 7(1) of the CGST Act, 2017. The very intention was to provide the maintenance services i.e. To maintain aircraft which shall be the primary supply of service.
  • Moreover, it would be irrelevant that the charge towards maintenance of aircrafts from HO to BO was merely an internal MIS entry and should not be looked at as provision of services by HO to BO because they both took separate GST registrations and would qualify as distinct persons under the GST regime. Therefore, it was held that charges of maintenance from HO to BO shall qualify as supply of service and GST would be leviable.