Goods and Services Tax – Started By: – Varsha Baid – Dated:- 16-11-2017 Last Replied Date:- 18-12-2017 – I have a query where one Indian company is serving a foreign company as an agent for procuring goods from overseas and selling the goods to India, the outgoing payment and incoming payment is effected to the foreign company and the Indian company is charging services in respect to the buying and selling arrangement.Is the Indian company liable to charge gst on such services or not since the service is export oriented being served to a foreign entity in foreign currency without any value addition of the goods in India or anywhere. – Reply By KASTURI SETHI – The Reply = Ultimately enjoyment of service is in India Hence taxable. – Reply By MARIAPPAN GOVINDARAJAN – The Reply = It is taxable. – Reply By Varsha Baid – The Reply = Thanks for your reply. But still I have a doubt that beneficiary is foreign company and services rendered is outside India. India company is only acting as an a
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ed 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. Explanation 1 of Section 8 of IGST Act, 2017 stipulates that- For the purposes of this Act, where a person has,- (i) an establishment in India and any other establishment outside India; (ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or (iii) an establishment in a State or Union territory and any other establishment being a business vertical registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons. In my opinion conditions (i) to (iv) of Section 2 (6) of IGST Act, 2017 are satisfied and hence what you are do
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on should be apparent.Thanks – Reply By KASTURI SETHI – The Reply = Dear Sh.Kalyani Ji,. I want to further share with you on this issue. Procurement of purchase order is a Supply of Service. And selling the goods is supply of goods. In this case both are not independent. They are completely intermingled. – Reply By Varsha Baid – The Reply = Thank u for your responses.I am putting the query in a more detailed way :A Uae company hires an agent in india who is arranging the supplies from Europe and USA and the subsequent selling arrangements to Indian customers. The shipments are coming from Europe/USA ports to Indian ports, there is nowhere agent's involvement in stocking or adding any value to such goods in India or anywhere. The deliveries of goods are taken by the customers upon payment to the uae company. The Indian agent is simply facilitating the sales for uae company as an agent directly from European Port. – Reply By KASTURI SETHI – The Reply = In view of revised query by the
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urchase and sale in foreign country ? Are you mentioning India on the basis of consignment passed through Indian Territory ? Were the goods unloaded in Indian territory ? I have not mentioned 'India' as non-taxable territory ? – Reply By Ganeshan Kalyani – The Reply = What is the model of transaction? – Reply By KASTURI SETHI – The Reply = As per Section 2(79) of CGST Act non-taxable territory means the territory which is outside the taxable territory; e.g. any foreign country etc. Commission Agent cannot be owner of goods. He is only intermediary only. Also read the concept of High Sea Sales. – Reply By KASTURI SETHI – The Reply = Also read this Notification 10/2017-IGST(Rate) dated 28.6.17 Sl. No. Category of Supply of Services Supplier of service Recipient of Service (1) (2) (3) (4) 1 Any service supplied by any person who is located in a non-taxable territory to any person other than non-taxable online recipient. Any person Located in a non-taxable territory Any person
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tra Ji,. Sir thanks for finalisation of the issue. All doubts stand cleared now. The querist must be satisfied now. – Reply By ANITA BHADRA – The Reply = Dear Sir / Madam In my view it is not export of services in the light of following provisions of IGST Act 2017:- Section 7(5) of IGST Act which provides Supply of goods or services or both,- (a) when the supplier is located in India and the place of supply is outside India; (b) to or by a Special Economic Zone developer or a Special Economic Zone unit; or (c) in the taxable territory, not being an intra-State supply and not covered elsewhere in this section, shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce. A plain reading of above provisions imply that where the location of supplier( service provider) is in India and place of supply is outside India it would be regarded as interstate supply and therefore fall under purview of section 5 of IGST act and hence leviable to IGST.
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directly impacting the foreign company's bank account. Your services will be treated as intermediary services and in case of intermediary services place of supply is Location of supplier . Actually in order to determine, whether the supply is Intra State supply or Inter State supply, two factors are involved and they are (1) Place of supply, (2) Location of supplier. If both are in same state then supply is 'Intra State and if they are in different State , the supply will be 'Inter State supply' Now come back to your case. In your case the supply is intermediary services. In Intermediary services the place of supply will always be the 'Location of supplier (Please refer Section 13(8)(b) of IGST Act, 2017). So the both factors are 'Location of supplier' and you will charge CGST+SGST. Your services will not be covered in Export of Services because the place of supply is India. – Reply By vijay kumar – The Reply = In my view, there are two supplies involved –
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