Export of Services
GST FAQ 3rd Edition – December, 2018 – GST Frequently Asked Questions (FAQs)
GST
21.2 Export of Services
Q 30. What is supply of services in the GST?
Ans. As in the earlier service tax regime, five conditions have been prescribed for a service to be treated as exports in GST. The five conditions comprised in the definition of the term “Export of Services” are cumulative and are to be fulfilled in totality in order to consider a transaction of supply of service as an export supply. They are as under:
(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 or in Indian rupees wherever permitted by the Reserve Bank of India; and
(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accor
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e of business” is defined in section 2(85) of the CGST Act, 2017 and includes
(a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or
(b) a place where a taxable person maintains his books of account; or
(c) a place where a taxable person is engaged in business through an agent, by whatever name called;
A fixed establishment is defined in section 2(50) of the CGST Act, 2017 and “means a place (other than the registered place of business) which is characterised by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services, or to receive and use services for its own needs.
Q 32. How is condition 5 viz 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 of the IGST Act, 2017 impac
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ated 28.06.2017 as amended by Notification 42/2017-Integrated Tax (Rate) dated 27.10.2017.
Further, requirement of remittance in foreign exchange has been relaxed by amendment in the definition of “export of services” in section 2(6) of the IGST Act, 2017 vide the IGST (Amendment) Act, 2018. The payment for such service can now be received by the supplier of service in Indian rupees wherever permitted by the Reserve Bank of India.
Q 34. Whether services supplied by an establishment of a person in India to any establishment of that person outside India, which are treated as establishments of distinct persons in accordance with Explanation 1 in section 8 of the Integrated Goods and Services Tax Act, 2017 taxable?
Ans. No. Such services are exempted with a condition that the place of supply should be outside India as per section 13 of the IGST Act, 2017 (Notification No. 15/2018-Integrated Tax (Rate) dated 26th July, 2018)
Manuals, Ready reckoner, Law and practice, Reference Guide,
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