2019 (11) TMI 1454 - AAAR - GST

Appellant's marketing and handholding services qualify as intermediary services under section 2(13) IGST Act 2017

In Re: Mayank Jain

In Re: Mayank Jain - 2020 (41) G. S. T. L. 556 (App. A. A. R. - GST - Mah.) Issues Involved:1. Classification of Marketing services under the proposed Agreement.2. Classification of Handholding services under the proposed Agreement.3. Determination of whether Marketing services constitute export of services as per Section 2(6) of the IGST Act.4. Determination of whether Handholding services constitute export of services as per Section 2(6) of the IGST Act.5. Condonation of delay in filing the appeal.Issue-wise Detailed Analysis:1. Classification of Marketing Services:The Appellant argued that the Marketing services provided under the proposed Agreement should be classified as 'Business Support Service' under SAC 9985, not as 'Intermediary service' under SAC 9961/9962. The Appellant contended that he operates as an independent service provider, not in a representative capacity, and does not have the authority to conclude or negotiate contracts on behalf of the Consultant Manager. The AAR, however, ruled that these services constitute intermediary services, as the Appellant facilitates the supply of services between the Consultant Manager and prospective investors.2. Classification of Handholding Services:For Handholding services, the Appellant maintained that these should also be classified as 'Business Support Service' under SAC 9985. The Appellant emphasized that the services provided are procedural, such as assisting with documentation and coordinating meetings, without participating in sales negotiations or acting on behalf of the Consultant Manager. The AAR disagreed, concluding that these services also fall under the category of intermediary services, as they facilitate the provision of investment-related services by the Consultant Manager to prospective investors.3. Export of Marketing Services:The Appellant argued that Marketing services should be considered an export of services under Section 2(6) of the IGST Act, as all conditions for export are satisfied, including the recipient being located outside India. The AAR ruled otherwise, stating that since the services are intermediary services, the place of supply is within India as per Section 13(8)(b) of the IGST Act, thereby not qualifying as an export of services.4. Export of Handholding Services:Similarly, the Appellant contended that Handholding services should be regarded as export of services under Section 2(6) of the IGST Act. The AAR held that these services, being intermediary services, have their place of supply within India, thus not meeting the criteria for export of services.5. Condonation of Delay:The Appellant filed the appeal with a delay of 2 days, believing the date of receipt of the physical copy of the ruling to be the relevant date. The delay was due to a genuine oversight. The Appellate Authority condoned the delay, noting that the appeal was filed within the permissible period of 60 days, including the maximum condonation period of 30 days allowed under Section 100 of the CGST Act, 2017.Judgment:The Appellate Authority upheld the AAR's ruling that the services provided by the Appellant are intermediary services and classified under heading 9997. It also agreed that these services do not qualify as export of services. The Authority condoned the 2-day delay in filing the appeal. The determination of the place of supply, which is essential for deciding the export status, was deemed beyond the jurisdiction of the Advance Ruling Authority.