Page 176 - GSTL_14th May 2020_Vol 36_Part 2

278 GST LAW TIMES [ Vol. 36
(b) The applicant enables satellite communication service providers
with necessary transponder capacity on INSAT/GSAT fleet in C,
Ext C, Ku and Ka-Ku bands to Indian users for Television Broad-
casting (TV), Direct to Home (DTH), Digital Satellite News Gather-
ing (DSNG), Very Small Aperture Terminal (VSAT) and Telephony
services. They also acquire the transponders from foreign satellite
operators on lease and provide the leasing services of the same to
the service providers.
(c) A communication satellite has the following basic parts :
(i) Satellite Housing - This is the outside container of the satellite.
(ii) Power System - This consists of Solar Panels as well as Batter-
ies to power the satellite.
(iii) Antenna System - This is to receive signals to make the satel-
lite’s operation in orbit.
(iv) Command and control system - This monitors the satellite to en-
sure that all vital operating parameters are working.
(v) Transponders - Electronic systems that amplify the frequency
of an uplink signal for retransmission to earth.
(d) A communication satellite cannot be without any of the aforesaid
parts. There will not be utility for such an equipment without Tran-
sponders, which receive the frequency of uplink signals, amplifies
them and retransmit the same to the earth in a downlink frequency.
The following two examples showcase the utility of Transponders.
(1) The TV programmes which are seen through DTH (Airtel TV,
Dish TV, Tatasky etc.,) are first uplinked to a Transponder
from earth and then downlinked to respective antennas at
home. Uplinking and downlinking of the signals is not possi-
ble without the Transponders.
(2) Financial Transactions through ATMs use satellite network
system at the backend. Withdrawal requests through ATM
travel from ATM to HUB via satellite link. Further the HUB
sends the said requests to respective bank & branch to pro-
cess the transaction and update the bank account statement.
4. Applicant’s understanding of the law :
The applicant submits, as per their understanding, that Leasing of
Transponders is covered under SAC 997319, which covers “Leasing or
rental services concerning other machinery and equipment with or with-
out operator”; the applicable GST rate, in terms of Notification No.
8/2017-Integrated Tax (Rate), dated 28-6-2017, as amended, under Entry
No. 17, in respect of the services with SAC 9973 and with description
“(viii) Leasing or rental services, with or without operator, other than (i), (ii),
(iii), (iv), (v), (vi) and (vii) above” is “same rate of Integrated Tax as appli-
cable on supply of like goods involving transfer of title in goods”; Tran-
sponder is a part of Satellite, falling under Chapter Heading 8803 as
“Parts of goods of Heading 8802 Satellites”; Goods of Heading 8802 60 00
i.e. Spacecraft (including satellite) and suborbital and spacecraft launch
vehicles are charged at Nil rate of Tax (GST) vide Sl. No. 140 of Notifica-
tion No. 2/2017-Integrated Tax (Rate), dated 28-6-2017, as amended till
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