2018 (12) TMI 227 – AUTHORITY FOR ADVANCE RULING, MAHARASHTRA – 2019 (20) G. S. T. L. 494 (A. A. R. – GST) – Levy of GST – export of service or not – intermediary services – “Commission” received by the Applicant in convertible Foreign Exchange for rendering services as an “Intermediary” between an exporter abroad receiving such services and an Indian importer of an Equipment – zero rated tax – section 16 (1) (a) of the Integrated Goods and Services Tax Act, 2017 – Place of supply – intra-state supply or not – rate of tax.
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Whether the commission received as an “intermediary” in International/ cross border transaction, for acting as a Broker or facilitator, in procuring from an Indian Customer/s purchase order/s (P.O.) for importing Laboratory Equipment from Germany, is liable to GST either under CGST/SGST Act, 2017 or the IGST Act, 2017?
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Held that:- The applicant is of the opinion that they are providing services as an intermediary. The facts also reveal likewise – an inte
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mine the place of service – Since the place of supply of services in the instant case is in taxable territory, the said intermediary services cannot be treated as export of services under the provisions of the GST laws.
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In order to classify as ‘export of service’, as per section 2(6) of the Integrated Goods and Service Tax Act, 2017, one of the crucial condition as contained under sub-clause (iii) requires that the place of supply of service should be outside India – In the subject case, the place of supply shall be location of the supplier of services and therefore such ‘intermediary services’ cannot be classified as ‘export of services’.
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The provisions of inter-state supply and intra-state supply have clarity when both the recipient and the supplier of services are located in India. However as in the subject case, when the recipient is located outside India provisions of section 7(5)(c) shall be applicable – IGST is payable under such transaction.
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Ruling:- The “Comm
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xchange for rendering services as an Intermediary between an exporter abroad receiving such services and an Indian importer of an Equipment, is an export of service falling under section 2(6) & outside the purview of section 13 (8) (b), attracting zero-rated tax under section 16 (1) (a) of the Integrated Goods and Services Tax Act, 2017? (ii) If the answer to the Q (i) is in the negative, whether the impugned supply of service forming an integral part of the cross-border sale/purchase of goods, will be treated as an intra-state supply under section 8 (1) of the IGST Act read with section 2 (65) of the MGST Act attracting CGST/MGST? And, if so, at what rate? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earli
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t Germany, by way of procuring Purchase Orders (P.O.) from the parties desirous of purchasing advanced type of Laboratory Equipment, by negotiating the terms of supply including fixation of price above the floor price fixed by the Principals (known to the Applicant alone). If Micro can negotiate better price than the floor price, the difference between the floor price and actual price is given to Micro by way of Commission in convertible foreign exchange . 2. The modus operandi of the negotiated transactions can be briefly summarized as under: (a) The prospective customer in India places the P.O. directly on the Principals at Germany, and arranges for Letter of Credit for remittance of price in foreign currency, (b) The principals directly supply the Laboratory Equipment to the party in India say M/s. Panama Laboratory, Mumbai a fictitious name) which pays price and gets the delivery from the Customs on payment of custom duty and IGST as applicable. (c) In the majority of cases, barrin
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t Note , for the Commission , which is remitted in freely convertible Foreign Exchange, normally in Euro Currency: (sign: €; code: EUR) the official currency of the European Union). (g) Micro was not issuing any Debit Note or Invoices or any other document, but Accounting was done only on the basis of the Credit Note/s. 3. Now, in the circumstances, the following questions arise for consideration & decision by this Honourable Advance Ruling Authority, Maharashtra State, Mumbai: (i) Whether the Commission received by Micro in convertible Foreign Exchange as an Intermediary in International/cross boarder transaction, for acting as a Broker or facilitator, in procuring from an Indian Customer/s purchase order/s (P.O.) for importing Laboratory Equipment from Germany, is liable to GST either under CGST/SGST Act, 2017 or the IGST Act, 2017? And if so, the rate of CGST, SGST and IGST respectively. (ii) If liable to GST, whether the entire amount of Commission as converted in rupees,
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is received in freely convertible currency. These activities would fall in the widely worded definition of Service , in section 2 (102), which reads: services means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged: (ii) section 13 of the IGST Act, 2017 is made applicable to determine the place of service, where location of supplier or location of recipient of service (either) is outside India. (iii) In the present caser Micro being the supplier of service (located in India in Taxable Territory) and customer i.e. recipient of Service (i.e. supplier of goods is located outside India, Germany, in Non Taxable Territory), Section 13 of the above IGST Act,2017 gets attracted. (iv) Section 13 of IGST Act, 2017 has in all 13 sub-sections applicable to different situat
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n agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies Such goods or Services or both or securities on his own account . (vi) Consequently, Micro being an Agent or Broker (or Commission Agent) and facilitator between the German -seller of the goods and the Indian-buyer of the goods, it shall be covered under the definition of Intermediary under Section 2 (13) of the IGST Act; but may not be regarded as providing intermediary Services , which expression is a coined phase, by the Draftsman, and not defined in any GST Law, i.e. CGST/SGST Act 2017 or IGST Act, 2017. Apparently, Intermediary is an adjective and qualifies services . {Adjective: 4. being between; intermediate. 5. Acting between persons, parties, etc.; sewing as an intermediate agent or agency: e.g. an intermediary power.} (vi) It may be argued that the Intermediary providin
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be met. (6) export of services means the supply of any service when,- (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8 . A plain reading of the definition of export of services Shows that the word means is used while defining. Where means is employed in the definition clause it shows that the definition enacted is a hard and fast one and that no other meaning can be assigned to the word defined than the one that is put down in the definition. Secondly, the definition starts by saying when and followed by each clause ending with a semi-colon showing close connection with each other and the last but one clause us
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en of 18% (9% CGST + 9% SGCT) under Services Tariff Heading 1-10.9997 (residuary entry). 7. Now, therefore, the CGST/ SGST will be payable in the Taxable Territory on account of the place of supply , being the place where the Supplier, i.e. Micro, is registered, that is in the State of Maharashtra. 8. In the context of the case on hand, the aforesaid interpretative process makes taxable intermediary services rendered by Micro to the recipient abroad in non-taxable territory, liable tax in Maharashtra State, which is the place where the Supplier (Micro) is Registered and happens to be the place of supply; and fortunately further also the destination state or consumption State ; because the Laboratory Equipment imported by M/s. Panama Laboratory, Mumbai, would be used by the Purchasing Customer, who is also residing in the State of Maharashtra. 9. Before looking at another example, a few words on new taxation Policy. Effective July 1, 2017 there has been a paradigm shift in taxation Poli
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on Policy would get a jolt; because the actual use of the goods imported would be in the State of Gujarat, whereas the tax will accrue to the state of Maharashtra, where the place of supplier and the place of supply synchronize. 11. The matter needs to be examined further. 12. Actually, the nature of supply is determined under Section 7 and 8 of the IGST Act, 2017 which reads: CHAPTER IV DETERMINATION OF NATURE OF SUPPLY Inter-State supply 7. (1) Subject to the provisions of section 10, supply of goods, where the location of the supplier and the place of supply are in- (a) two different States; (b) two different Union territories; or (c) a State and a Union territory, shall be treated as a supply of goods in the course of inter-State trade or commerce. (2) Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce. (3) Subject to the provisions of section 1
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on hand is taken out of the IGST Act and by virtue of the Supplier s Location and the Place of Supply make the transaction fall into the trap of the intra-state service and hence would attract 9% CGST+ 9% SGST, in the aggregate 18%, the services being Classifiable under the Residuary Tariff Classification, namely, 9997 14. With the result that the benefit of Zero rated tax defined under Section 16 of the IGST Act, 2017 is unavailable, simply because the role played by the Micro is treated as Intermediary Services under section 13 (8) (b) of the IGST Act. 15. As a direct consequence of this situation, although all other transactions of export of goods or service or both get the advantage of zero tax burden the case on hand gets discriminatory dispensation by saddling it with unintended cost burden of 18%, (with another Income Tax burden @ 30%) and to add salt to the injury, Refund of such CGST/SGST in unavailable, being forward charge . 16. However, there is another way to look at this
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o carries on business of its own, it is certainly not an Agent as defined in section 2 (5) of the CGST Act, 2017. But surely, the activities of Micro are in the nature of intermediary as defined in section 2 (13) of the IGST Act, for bringing together the Principals abroad (Germany,) and the Indian Customer (M/s. Panama Laboratory), who wants to buy a high-end product. What is received by Micro may be called brokerage for the sale of goods. Even if it is called commission it is specifically understood as being in respect of and in relation to the transaction of sale of goods directly made by the German-seller and the Indian buyer, and which at the hands of the Indian-buyer, M/s. Panama Laboratory, is an Import in every sense of the term. In other words, the nature of supply is intended to be and actually an international or cross-border transaction, export/ import of goods simpliciter, which under the GST regime is tan inter-state supply, covered by the IGST Act, 2017; and if that be t
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f the IGST Act, 2017 reads: CHAPTER VII ZERO RATED SUPPLY Zero rated supply. 16. (1) zero rated supply means any of the following supplies of goods or services or both, namely:- (a) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. (2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. (3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:- (a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or (b) he may supply goods or services or both, subject to such con
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rvices , which is not simply a coined expression, but seems to have acquired a well set connotation. This expression is not used for the first time by the Legislature. 23. It may be added that this precise expression: Intermediary service was adopted by the Delegated Legislation while framing the Place of Provision of Service Rules, 2012 (POPS Rules, 2012). In those Rules, Rule 2 (f) had defined intermediary as below : (F) Intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the main service) between two or more persons, but does not include a person who provides the main service on his account.; The POPS Rules, 2012 came into force effective 01-07-2012 and Rule 9 of the said Rules, 2012 is exactly the same as now bodily lifted and placed in its new GST avatar as section 13 (8) (b) of the IGST Act. The said Rule 9 of the POPS Rules, 2012 and the clarification issued by the Board (C.B
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supplies at any one time: i) the supply between the principal and the third party; and ii) the supply of his own service (agency service) to his principal, for which a fee or commission is usually charged. For the purpose of this rule, an intermediary in respect of goods (such as a commission agent i.e. a buying or selling agent, or a stockbroker) is excluded by definition. VIDE Rule 2 (i) of the POPS Rules, 2012 (supra). Also excluded from this sub-rule is a person who arranges or facilitates a provision of a service (referred to in the rules as the main service ), but provides the main service on his own account. UNQUOTE: Rule 2(1) defines intermediary to mean a broker, any agent or any other person, by whatever name called, who arranges or facilitates a provision of a service(hereinafter called the main service ) between two or more persons (it doesn t include a person who provides service on his own account). Thus an intermediary service is involved with two supplies at one time.
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and should be given the same meaning which they carry in the Sale of Goods Act, 1930. The expression sale of goods is a nomen juris, its essential ingredients being an agreement to sell movables for a price and property passing therein pursuant to that agreement 25. In this connection one must take a note of the Amendment to the definition of intermediary in Rule 2 (1) of the POPS Rules, 2012. 26. By Notification No. 14/2014 – Service Tax, dated the 11th July, 2014, The Place of Provision of Services (Amendment) Rules, 2014, were brought into force on the 1st day of October, 2014: (1) In the Place of Provision of Services Rules, 2012, (a) in rule 2 for clause the following clause shall be substituted. namely: (f) intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the main service) or a supply of goods, between two or more persons, but does not include a person who provides the mai
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adopted in Rule 9 (c) of the POPS Rules, 2012 as it existed pre-Amendment of 2014, effective 04-10-2014 of section 2 (f) of the POPS Rules, 2012. The pivotal issue in the case on hand turns on the interpretation of the expression: intermediary services in Section 13 (8) (b) of the IGST Act. 29. At this stage, it is necessary to refer to some well known Rules of Interpretation of statues before embarking on the interpretative process: (i) Legislative enactment is an edict. One has to read what is expressly stated in the enactment. (ii) It is not necessary to survey innumerable Apex Court decisions on the Statutory Rules of Interpretation. Suffice it to quote one: Raghunath Rai Bareja And Another vs Punjab National Bank and Others (CASE NO. Appeal (civil) 5634 Of 2006 Decided on 6 December, 2006 = 2006 (12) TMI 479 – SUPREME COURT OF INDIA (a) It may be mentioned in this connection that the first and foremost principle of interpretation of a statute in every system of interpretation is t
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ct or make up the deficiency, especially when a literal reading thereof produces an intelligible result, vide Delhi Financial Corporation vs. Rajiv Anand 2004 (11) SCC 625 = 2004 (3) TMI 749 – SUPREME COURT OF INDIA. (h) Where the legislative intent is clear from the language, the Court should give effect to it, Vide Government of Andhra Pradesh vs. Road Rollers Owners Welfare Association 2004 (6) SCC 210 = 2004 (4) TMI 602 – SUPREME COURT, and the Court should not seek to amend the law in the grab of interpretation. 30. In the light of the aforesaid rules of interpretation, it can be said that when the Legislature has used two un-identical and non-synonymous terms/ expression, it has to be inferred that it did not want to convey the same meaning. It may also be noted that the Legislature does not use any surplusage or superficial words or phrases. 31. If the provisions of section 13 (8) (b) of the IGST Act, were to cover and encompass both the types of Brokers, Agents in relation to g
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f the legislature from the object of the statute, the context in which the provision occurs and the purpose for which it is made. (iv) In the case on hand, the section 13(8) of the IGST Act is intended to apply to specified services , and clauses (a) and (c) relate to pure services . Clause (b) Cannot take in its fold services in relation to goods ; because the entire GST Law maintains dichotomy between the goods and services . (v) Further, it is well settled that every word or phrase in a clause takes colour from the other related clauses in the same section, namely, sub-section (8), section 13 of IGST Act. (vi) As stated earlier, if the Legislature wanted to have wider meaning of services , it would have used the phraseology services of intermediary rather than Intermediary services (vii) It is not open to inject definition of intermediary as Amended in 2014, by interpretative process when the context of Section 13 (8) is specifically restricted & made applicable to specified/sel
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ad in, nothing is to be implied; one can only look fairly at the language used and nothing more and nothing less. (J. Srinivasa Rao v. Govt. of A.P. and Anr. 2006 (13) SCALE 27 = 2006 (11) TMI 620 – SUPREME COURT OF INDIA, Raja Jagadambika Pratap Narain Singh v. C.B.D.T., [1975] 100 ITR 698(SC) = 1975 (7) TMI 1 – SUPREME COURT] (xii) Moreover, it is settled law that by an interpretative process the legislative edict cannot be altered or re-written to bring out presumed intention. 32. In conclusion, it is respectfully submitted : (a) The defined term or phrase must receive the same meaning throughout the statute. (b) When the Legislature uses a particular phraseology, full meaning must be given by following the rules of English grammar. In that sense, the word: intermediary being an adjective of services, in section 13(8) (b), the defined word: intermediary cannot be brought-in to inject the concept of services relating to goods. (C) The expression, intermediary services had acquired de
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ods by the Indian Customer from the Seller-supplier (Germany) under the cross-border transaction, (b) If in the unlikely event it is held that either CGST/SGST or IGST is payable, then: (i) the rate of GST payable, (ii) and the taxable value , gross or net commission (after deducting value of free supply of goods by Micro, as per PO) for levy of GST may also be determined. (c) The Applicants crave leave to add, delete or modify the submissions made herein either before or at the time of hearing. STATEMENT CONTAINING APPLICANTS INTERPRETATION OF LAW IN RESPECT OF THE QUESTIONS RAISED IV-STATUTORY PROVISIONS: 7. Before proceeding to make legal submissions, it is necessary to Review the statutory provisions of law: (i) Section 2 of the IGST Act: export of services means the supply of any service when, – (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such se
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mp; separately. Sub-section (8) covers the case on hand; and the same is reproduced here below – (8) The place of supply of the following services shall be the location of the supplier of services, namely: (a) Services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders; (b) Intermediary services; (c) Services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month. (v) The term Intermediary is defined in Section 2(13) of the IGST Act: (13) intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account . (vi) Consequently, the Applicant being a Broker (or Commission Agent) and facilitator between the German -seller of t
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inciple of interpretation of a statute is the literal rule of interpretation. (iv) The other rules of interpretation e.g. the mischief rule, purposive interpretation etc. can only be resorted to when the plain words of a statute are ambiguous or lead to no intelligible results or if read literally would nullify the very object of the statute. (vi) Where the words of a statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule, vide Swedish Match AB vs. Securities and Exchange Board, India, AIR 2004 SC 4219 = 2004 (8) TMI 389 – SUPREME COURT OF INDIA. (vii) (vi) As held in Prakash Nath Khanna vs. C.I.T. 2004 (9) SCO 686 = 2004 (2) TMI 3 – SUPREME COURT, the language employed in a statute is the determinative factor of the legislative intent. (vii) The legislature is presumed to have made no mistake. (viii) The legislature intends to say, what it has said. (ix) Assuming there is a defect or an omission in the words
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f the Broker / Agent in relation to either the goods or services or even both. 11. Section 13(8) (b) has, however, adopted the expression: intermediary services which expression was prevalent prior to 2014-Amendment of POPS Rules, 2012, which distinguishes it from the main service . There are other weighty reasons: (i) As laid down by the Apex Court (Delhi Transport Corporation vs. D.T.C. Mazdoor Congress on 4 September, 1990 = 1990 (9) TMI 334 – SUPREME COURT), the doctrine of reading down is applied where the provisions of the statute are vague and ambiguous and it is possible to gather the intention of the legislature from the object of the statute, the context in which the provision occurs and the purpose for which it is made. In the case on hand. the title of section 13(8) of the IGST Act shows that it is meant to apply to specified services , and clauses (a) and (c) relate to pure services . Clause (b) cannot take in its fold services in relation to goods ; because the entire CSI
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ervice/s (vi) By process of reading down, the clause must be held as applicable only if the intermediary is acting in the main transaction of supply of services between the service provider and the service recipient, and not Where the seller supplies goods to the buyer or recipient of supply. (vii) Any other interpretation would be against the Legislative mandate used to pin-point its intention. (viii) It well settled: *Thus, the language of a taxing statute should ordinarily be read understood in the sense in which it is harmonious with the object of the statute to effectuate the legislative animation. A taxing statute should be strictly construed; common sense approach, equity, logic, ethics and morality have no role to play. Nothing is to be read in, nothing is to be implied; one can only look fairly at the language used and nothing more and nothing less. (J. Srinivasa Rao v. Govt. A.P. and Anr. 2006(13) SCALE 27 = 2006 (11) TMI 620 – SUPREME COURT OF INDIA, Raja Jagadambika Pratap
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, in section 13(8) (b), the defined word: intermediary cannot be brought-in to inject the concept of services relating to goods. (C) The expression, intermediary services had acquired definite connotation when the POPS Rules, 2012 were brought in to play, namely, the services differentiated from the *main services . Since the term intermediary services is nomen juris. it must be interpreted in its legal sense only: (d) It therefore. follows that the section 13(8) (b) cannot be held as taking away the benefit of export service as defined in section 7 (5) (a) of the IGST Act. Consequently zero-rated tax benefit under section 16 would be available. VI-PRAYER: 13. In the circumstances, the Applicant most respectfully prays: (a) That it be held that the services of the Applicant as an intermediary are received & consumed by the Principals in Germany, and as such the place of supply is Germany as per section 13(2) of the IGST Act, and hence all the conditions in section 2(6) are concurre
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summarized in Brief Facts fall under Export of Services under Section 2(6), attracting Zero rated Tax under Section of IGST Act 2017. Section 2(6) of IGST Act States (6) export of services means the supply of any service when- (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8. As per Section 97(2) of CGST MGST Act 2017, The question on which the advance ruling is sought under this Act, shall be in respect of (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d
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n. (Ref. Decision by Haryana Authority for Advance Ruling HAR/HAAR/R/2018-19/6) = 2018 (7) TMI 1334 – AUTHORITY FOR ADVANCE RULINGS HARYANA. Secondly, we may refer to submission by dealer under heading Rules of Interpretation (Page No-6, point No-ii) which argues about consideration must yield to clear & express provisions of the law . Also as per point No. vi and vii, dealer has quoted that – legislature is presumed to have made no mistakes and legislature intends to say, what it has said. B. Without prejudice to above, I further submit that dealer s contention to differentiate intermediary Service for Service and intermediary Services for goods is not correct. The dealer has pointed out dichotomy between goods and Services and has argued that Section 13(8) connotes to Specified Services for Services and not for goods. He has argued to differentiate between Intermediary Services and Services of intermediary. It must be noted that the constitution (one hundred and first amendment)
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Sh. D. P. Bhave, Advocate along with Sh. Ajay Wadke, C.A. duly authorized appeared and requested for admission of application as per details in their application. Jurisdictional Officer Sh. Nitesh Bhandari, Asstt. Commr. of S.T. (D-906), Mumbai was present and stated that they would be making detailed submissions in due course. The application was admitted and called for final hearing on 24.07.2018, Sh. D. P. Bhave, Advocate along with Sh. Ajay Wadke, C.A. appeared and made oral and written submissions. The Jurisdictional Officer, Sh. Rishikesh Wagh, Asstt. Commr. of S.T. (D-906), Mumbai appeared and stated that they would be making submissions immediately. 05. OBSERVATIONS We have gone through the facts of the case, submissions made by the applicant and the documents on record. The applicant, Ms Vishaka Prashant Bhave, is the proprietor of the firm M/s. Micro Instruments (hereinafter referred to, as MI ) and had made the subject application in her capacity as a proprietor. Briefly st
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and not by MI. On the basis of the above said facts, the applicant has raised the main question as to whether the commission received by them as an intermediary in International/ cross border transaction, for acting as a Broker or facilitator, in procuring from an Indian Customer/s purchase order/s (P.O.) for importing Laboratory Equipment from Germany, is liable to GST either under CGST/SGST Act, 2017 or the IGST Act, 2017? In simple terms intermediary can be explained as a firm or a person, etc. Who acts as a link between parties for the conduction of business, etc. We find from the question posed that the applicant is of the opinion that they are providing services as an intermediary. The facts also reveal likewise and therefore we first take up the definition of an intermediary as per GST laws. The term Intermediary is defined in Section 2(13) of IGST Act, 2017 as:- intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the s
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supplying the goods on their own account. The applicant at point no. 5 of their submission have clearly stated that the services provided by them in the subject case would be termed as taxable services under the GST Regime, because they do some activity for which monetary consideration, that is, Commission amount is received by them, in this case, in freely convertible currency. We agree with this contention of the applicant that they are providing taxable services in the instant case. Since the applicant, being the supplier of service is located in India and the recipient of Service i.e. supplier of goods is located outside India, Section 13 of the IGST Act, 2017 would be applicable to determine the place of service. As per Section 13 (8) (b) of the said Act, the place of supply of Intermediary Services shall be the location of the supplier of services, in this case, the applicant. Since the place of supply of services in the instant case is in taxable territory, the said intermediary
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visions under the GST laws as follows:- Inter State provisions are contained under section 7 of the Integrated Goods and Service Tax Act, 2017 and since none of the specific provisions are applicable, residuary provision contained under section 7 (5) (c) shall be made applicable in the case of intermediary service, which states that inter-state supply of goods or services or both in the taxable territory shall be treated to be a supply of goods or services or both in the course of inter-state trade or commerce, however, the same should not be an intrastate supply and should not be covered elsewhere in section 7 of the IGST Act. Section 8 of the Integrated Goods and Service Tax Act, 2017 deals with the provisions of intra-state. Applying the provisions of section 8 (2) which states that subject to the provisions of section 12, in case where the location of the supplier and the place of supply of services are in the same state or in the same union territory, the supply of service shall b
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the place of supply of service where the location of supplier of services and the location of recipient of the services is in India. When recipient is located outside India the said provisions of section 12 cannot be made applicable and since provisions of section 8(2) are inter-linked with provisions of section 12, the same cannot be made applicable in case the recipient of service is located outside India. Thus we find that in case the intermediary services are provided to the recipient located outside India, the inter-state provisions as contained under section 7(5) (c) shall be applicable and hence IGST is payable under such transaction. 06. In view of the extensive deliberations as held hereinabove, we pass an order as follows : ORDER (under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA-23/2018-19/B-87 Mumbai, dt. 10/08/2018 For reasons as discussed in the body of the order, the questions are answered th
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