export fo services
Query (Issue) Started By: – Madhavan iyengar Dated:- 12-1-2019 Last Reply Date:- 20-1-2019 Goods and Services Tax – GST
Got 9 Replies
GST
A indian Company X in new delhi has received a contract for submission of a quality audit report, for one of the clients based in haryana india of an overseas company B located in US.
X will raise invoice in USD and receive money in foreign exchange
Whether the aforesaid services provided by X will fall under export of services as all conditions for export will be satisfied (but doubt on performance of services will it be held that POPS is in India ????)
Reply By PAWAN KUMAR:
The Reply:
As per my view, place of supply of service is in india which is different from the place of supplier, therefore it is qualify as inter-state supply and liable to IGST. Export of service is not qualify
all the conditions should satisfy for export of service :
-supplier of service is in india
-receiver of service is outside india
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DVANCE RULING, MAHARASHTRA , to qualify a transaction of supply of service as export of services that transaction has to satisfy all five ingredients of the definition of export of services simultaneously. So in your situation the condition at (iii) of the above definition is not satisfied. Go through the whole decision carefully. It answers your query.
Reply By Madhavan iyengar:
The Reply:
sirs When we talk of gst as a destination based tax the taxes will follow the goods / services here the destination of the service is the recipient located abroad, suppose let us mirror the transaction in india then definitely the destination of the services is in india.
going a step further the foreign party which receives the quality audit report will based on the report decide to do business in india and then there will be imports of those goods into india
just because the performance of the service is in india the recipient will receive the quality audit report abroad and he is consuming the
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gst the service provider is located in maharashtra and deputes his person to other state ie haryana and the service is completed and thereafter the person comes to Maharahstra base office and the report will be submitted
Further the invoice will be raised by the office in maharashtra in USD on foreign party since we cant collect the tax from foreign vendor can we arrive the amount inclusive of tax and then discharge the tax suppose we raise invoice for 100USD gross and then tax will be calculated in reverse way and discharged
Reply By Madhavan iyengar:
The Reply: Market research, survey for overseas group, parent entity, not 'intermediary service', constitutes 'export of service': AAR of Maharashtra
Fact: M/s. Asahi Kasei India Private Limited = 2019 (1) TMI 1091 – AUTHORITY FOR ADVANCE RULINGS MAHARASHTRA (“the applicant”) is a Indian subsidiary company of Asahi Kasei Corporation, Japan ("Asahi Japan"). Asahi Japan is the flagship company of the Asahi Kasei group. Asahi K
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rvices provided by the applicant is an export of services as defined under Section 2(6) of the IGST Act 2017?
Held: The Hon'ble AAR of Maharashtra vide its Advance Ruling No. GST-ARA-35/2018-19/B-108 dated September 05, 2018 = 2019 (1) TMI 1091 – AUTHORITY FOR ADVANCE RULINGS MAHARASHTRA stated as follows:
1. (i) The services provided by the applicant in the nature of Research on the matter related to functioning of the holding of company such as – corporate accounting, corporate finance, corporate personnel and labour relations, corporate research and development, quality assurance and corporate intellectual property, and provide Party A with its report of the research thereon would fall under service code tariff 99859 as other support services nowhere elsewhere classified.
(ii) The services provided by the applicant in the nature of Information on Market in the territory which includes – Economic, industrial and technical information on the products falling under the category of t
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