Page 180 - GSTL_14th May 2020_Vol 36_Part 2

282 GST LAW TIMES [ Vol. 36
(d) High Power Amplifier : - An electronic amplifier that
increases the power of a downlink signal to compen-
sate the transmission losses so that user terminal re-
ceives sufficient signal strength to function adequate-
ly.
A Communication Satellite cannot be without any of the aforesaid parts and
there will not be any utility for satellite without transponders.
In a Communication satellite, transponder is the satellite part through
which various application services like TV Broadcasting services, Digital Signal
Network Gathering (DSNG) services, Direct to Home (DTH) broadcast services,
Very Small Armature Terminal (VSAT) for closed network communication ser-
vices, Telephony, etc., are rendered to the users. Rest of the satellite systems, as
detailed under Satellite Bus are the supporting systems for proper functioning of
transponders.
(D) Taxability of Lease of Transponders under GST Act :
The Applicant submits that in their understanding, leasing of transpond-
ers are covered under the SAC Code 997319 - “Leasing or rental services concern-
ing other machinery and equipment’s with or without operator”. The rate of GST
applicable is covered vide Notification No. 8/2017-Integrated Tax (Rate), dated
28-6-2017 as amended till date under the following entry.

Sl. Heading Description of Services Rate of Tax
No.
17 9973 (viii) Leasing or rental Same rate of integrated tax
services, with or without as applicable on supply of
operator, other than (i), like goods involving trans-
(ii), (iii), (iv), (v), (vi) and fer of title in goods.
(vii) above.
As transponder is a part of satellite, it is covered under HSN 8803 - Parts of
goods of Heading 8802. Satellite are charged at Nil Rate of tax as per Sl. No. 140,
HSN - 8802 60 00 - Space craft (including satellites) and sub-orbital and space
craft launch vehicles vide Notification No. 2/2017-Integrated Tax (Rate), dated
28-6-2017 as amended till date.
Parts of goods of heading 8802 (Transponder) is charged at 5% Rate of
tax as per Sl. No. 245, HSN 8803 - Parts of Goods of Heading 8802 of Schedule-1
of Notification No. 1/2017-Integrated Tax (Rate), dated 28-6-2017 as amended till
date.
Further the Applicant submits that the transponder cannot be classified
under the Heading 8525 60 92 as “Other Satellite Equipment” since it consist of
ground segment that comprises of the following :
• Uplink Station (to send signals from earth to Satellite).
• Downlink Station (to receive signals from earth to Satellite).
Ground Segment is established at earth and which transmits (uplink) the
signals to satellite transponders and receive (downlink) the signals from satellite
at ground. Whereas, the Space segment comprises of Satellite located at a Speci-
fied orbital slot in space with transponder for catering various application/user
needs.
The Applicant further submits that, the Tariff Heading 8525 60 92 of the
Customs Tariff Act - “Other Satellite Communication Equipment” covers those
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