Notification No. 02/2020 – Integrated Tax Explained

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Notification No. 02/2020 - Integrated Tax: Seeks to amend Notification No. 4/2019-Integrated Tax dt. 30.09.2019 to change the place of supply for B2B MRO services to the location of the recipient.

[TO BE PUBLISHED IN THE GAZZETE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

G.S.R......(E).- In exercise of the powers conferred by sub-section (13) of section 13 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government, on being satisfied that it is necessary in order to prevent double taxation or non-taxation of the supply of a service, or for the uniform application of rules, on the recommendations of the Council, hereby makes the following amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.4/2019- Integrated Tax, dated the 30^th September, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 748 (E), dated the 30^th September, 2019, namely:-

In the said notification, in Table A, after serial number (1) and the entries relating thereto, the following serial number and entry shall be inserted, namely: -

(1)	(2)	(3)
“2	Supply of maintenance, repair or overhaul service in respect of aircrafts, aircraft engines and other aircraft components or parts supplied to a person for use in the course or furtherance of business.	The place of supply of services shall be the location of the recipient of service.”

2. This notification shall come into force with effect from the 1^st day of April, 2020.

(Pramod Kumar)
Director to the
Government of India

📚 Frequently Asked Questions (FAQs): Notification No. 02/2020 – Integrated Tax

Q1: What does Notification No. 02/2020 – Integrated Tax introduce?

Answer:
It shifts the place of supply for B2B aircraft MRO services to the location of recipient.
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Q2: What is the effective date?

Answer:
1 April 2020.
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Q3: What law is applied here?

Answer:
Power exercised under Section 13(13) of IGST Act, 2017.
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Q4: Does this apply to B2C?

Answer:
No ❌ Only B2B aviation services.

Q5: What GST impact for foreign airline recipients?

Answer:
Service becomes zero-rated export (subject to conditions).

Q6: Is payment in foreign currency mandatory?

Answer:
Yes — to qualify as export of services.

Q7: Are spare parts supplied separately included?

Answer:
Taxed separately — goods supply rules apply.

Q8: Does location of workshop matter now?

Answer:
No — POS driven solely by recipient location.

Q9: Benefit for India’s aviation sector?

Answer:
Significant — aligns with global MRO tax norms, improving cost competitiveness.

Q10: Does the customer need to be registered under GST?

Answer:
Yes — for “business purpose” validation & B2B classification.

Q11: Can SEZ units avail zero-rated benefits?

Answer:
Yes ✔ with LUT/IGST refund options.

Q12: What if the airline is unregistered in India but is a business entity abroad?

Answer:
Still treated as export of service if conditions satisfied.

Q13: Does this require changes in invoice format?

Answer:
Yes — mention POS as recipient’s location.

Q14: What about reverse charge applicability?

Answer:
Not impacted by POS — based on supplier/recipient status.

Q15: Can Finodha assist with export contract GST planning?

Answer:
Absolutely ✔
👉 https://finodha.in/gst-compliance/

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