In Re: Esprit India Private Limited, Gurugram
GST
2019 (2) TMI 1005 – APPELLATE AUTHORITY FOR ADVANCE RULING, HARYANA – 2019 (22) G. S. T. L. 144 (App. A. A. R. – GST)
APPELLATE AUTHORITY FOR ADVANCE RULING, HARYANA – AAAR
Dated:- 22-11-2018
HAAAR/2018-19/02
GST
AMIT KUMAR AGRAWAL AND MANORANJAN KAUR VIRK, MEMBER
Appellant Represented by: Sh. Nitin Agrawal, Power of Attorney Holder, M/s. Esprit India Pvt. Ltd.
Department Represented by: Sh. Amreshwar Gautam, Asstt. Commissioner Sh. S.K. Saini, Jt. Director(Legal)
Order under Section 101 of the Central Goods and Services Tax Act, 2017/the Haryana Goods and Services Tax Act, 2017.
The present appeal has been filed under Section 100 (1) of the Central Goods and Services Tax Act, 2017/the Haryana Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and HGST Act respectively”] by M/s. Esprit India Private Limited [hereinafter referred to as the “Appellant”] against the Advance Ruling No. HAR/
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s entered into an agreement dated 18.07.2016 with Esprit India Pvt. Ltd. in terms of which Esprit India Pvt. Ltd. has undertaken to provide various sourcing support services to EDCFE in relation to performance of the obligations under EDCFE's contract with Esprit Germany.
3. Under the agreement, Esprit India Pvt. Ltd. is appointed by EDCFE to provide services to EDCFE in relation to goods and merchandise including wearing apparel, shoes & accessories and fabric. A brief description of the functions/responsibilities of EDCFE and Esprit Germany and Esprit India Pvt. Ltd. is listed below:
Sr.No.
Functions/Activities
Role of EDCFE/Esprit Germany
Role of Esprit India
1.
Market research
No role
Esprit India conducts market research to understand market dynamics, gather pricing information from different suppliers and advise on the best available combination of price, quality and delivery of the goods for Esprit Germany.
2.
Purchase of goods and trademark protection
Esprit Germany
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in respect of goods sourced from India
Esprit India only communicates the terms and conditions to the extent of instructions and requirements received from Esprit Germany (through EDCFE) but is not involved in negotiation.
5.
Inspection and quality control
Esprit Germany and EDCFE frame guidelines for quality control procedures to be adopted during manufacturing, stock keeping in warehouse and transportation.
Esprit India based on the guidelines received from EDCFE conducts quality checks at various stages of production. It also checks whether the goods meet the specification, quality, delivery time, and other requirement of Esprit Germany.
6.
Logistics
Products are dispatched by the suppliers to Esprit Germany.
Esprit India makes logistics arrangement for the goods in accordance with the instructions of Esprit Germany received through EDCFE and assure that all documents related to shipment of the goods Esprit Germany are proper.
7.
Contract conclusion
No role
Espri
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different categories.
C. The Ld. AAR had arbitrarily and erroneously held that the questions asked by the Appellant were out of the scope of the Section 97(2) of Central Goods and Services Tax Act 2017 (CGST Act) /Haryana Goods and Services Tax Act 2017 (HGST Act) and the questions could not be taken up by the AAR due to lack of jurisdiction.
D. Services provided by the Appellant were not 'intermediary' services.
* The Appellant in no manner 'arranged' or 'facilitated' sale of Goods from vendors in India to Esprit Germany
* The Appellant does not qualify as an 'agent' or a 'broker' for EDCFE
E. The services performed by the Appellant are in nature of “support services”
F. Services in the present case are indeed exported. Services provided by the Appellant would qualify as 'exports' in terms of Section 2 (6) of Integrated Goods and Services Tax Act 2017 (the IGST Act).
G. The remuneration of the Appellant for support services to EDCFE is independent of purchase of goods by Esp
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ant pleaded that his services fall in the ambit of export services treating the same as zero rated supply of services.
In support of his arguments, Sh. Nitin Agrawal has referred to following judgments of the Hon'ble Courts and the decisions of the Authorities under the Goods and Services Tax Act:-
1. CST v. Ernst & Young Pvt. Ltd., 2014 (34) S.T.R. 3 (Del.) = 2014 (2) TMI 1133 – DELHI HIGH COURT on 25-February 2014.
2. Commissioner of Service Tax, New Delhi v. Menon Associates (2015 77 VST 168 Del.) = 2014 (11) TMI 970 – DELHI HIGH COURT
3. Commissioner of Service Tax, New Delhi v. Menon Associates (2015 77 VST 168 Del.) = 2014 (11) TMI 970 – DELHI HIGH COURT
4. Sunrise Intermediary services-case law.
5. ARA ruling Global Reach Education [2018-VIL-06-AAR] WB 2017-18-02 (West Bengal) = 2018 (4) TMI 808 – AUTHORITY FOR ADVANCE RULING, WEST BENGAL
6. AAR ruling Gogte Infrastructure Development Corporation Ltd. (2018-VIL-30-AAR-02) Karnataka. = 2018 (5) TMI 759 – AUTHORITY FOR ADVA
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of time and value of supply of goods or services or both;
(d) admissibility of input tax credit of tax paid or deemed to have been paid;
(e) determination of the liability to pay tax on any goods or services or both;
(f) whether applicant is required to be registered;
(g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.”
To controvert the cited authorities of other States, it is pleaded by the department that the same are not binding on the appellant and in support of this argument, the provisions of Section 103 have been refereed to, which read as under:-
“103. (1) The advance ruling pronounced by the Authority or the Appellate Authority under this Chapter shall be binding only-
(a) on the applicant who had sought it in respect of any matter referred to in sub-section (2) of section 97 for advance ruling.
(b) on the concerned
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ng questions :-
(i) Taxability of above stated services provided by Esprit India to its associate concern in Hong Kong EDCFE under GST regime.
(ii) Whether the above stated services provided by Esprit India are covered under Export of Services having Zero rated taxability.
(iii) Whether Esprit India is eligible for seeking refund of GST for the taxes paid on input services or goods or both.
The Id. AAR has answered all the Questions raised, in term of relevant provisions of the GST Act and by giving detailed reasons. The plea of the appellant, that the AAR has given SAC & description alongwith tax rate which was not asked for, does not hold water because AAR has clarified each and every aspect raised in the application for Advance Ruling by giving self-explanatory findings. Thus the arguments raised by the appellant are untenable.
The case laws cited by the appellant are distinguishable as the facts and circumstances of the present case are different. The appellant has himself adm
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