Training services to apprentices classified as composite supply under Section 2(30) CGST Act, place of supply in India disqualifies zero-rated export treatment.

The AAAR held that the appellant's multiple activities including construction and training services constituted a composite supply under Section 2(30) of CGST Act, 2017, with training services as the principal supply. The training services provided to apprentices, unskilled workers, and students on behalf of the German principal were classified under SAC 999294 as performance-based services. Since services were performed at appellant's Indian premises, the place of supply was determined to be in India under Section 13(3)(b) of IGST Act, 2017. Consequently, the supply did not qualify as export of services or zero-rated supply as it failed to meet the requirement that place of supply be outside India under Section 2(6) of IGST Act, 2017.

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Issues Involved:
1. Classification of services provided by the Appellant.
2. Determination of whether the services qualify as 'export of services' and 'zero-rated supply' under the IGST Act, 2017.
3. Determination of the place of supply of services.

Issue-wise Detailed Analysis:

1. Classification of Services Provided by the Appellant:
The Appellant is engaged in various activities, including the construction of a training center and providing training to apprentices, unskilled workers, and students. The Maharashtra Authority for Advance Ruling (MAAR) initially classified these activities under SAC 999792 ("Agreeing to do an act"). However, upon appeal, it was determined that the activities constitute a "composite supply" with the principal supply being training services. Thus, the appropriate classification is under SAC 999294 ("Other education and training services nowhere else classified").

2. Determination of Whether the Services Qualify as 'Export of Services' and 'Zero-Rated Supply':
The Appellant contended that their services should be considered as 'export of services' and thus qualify as 'zero-rated supply' under Section 16(1) of the IGST Act, 2017. However, for services to qualify as 'export of services' under Section 2(6) of the IGST Act, 2017, five conditions must be met, including that the place of supply should be outside India. Since the place of supply for the Appellant's services was determined to be in India, the services do not meet the criteria for 'export of services' and cannot be considered 'zero-rated supply'.

3. Determination of the Place of Supply of Services:
The Appellant argued that the place of supply should be determined under Section 13(2) of the IGST Act, 2017, which prescribes the place of supply as the location of the recipient (Prettl GmbH, located outside India). However, the services provided by the Appellant were deemed to be performance-based services requiring the physical presence of the trainees (apprentices, unskilled workers, students) in India. Therefore, the place of supply was determined to be in India under Section 13(3)(b) of the IGST Act, 2017.

Conclusion:
The Appellate Authority modified the MAAR's ruling, classifying the services under SAC 999294 and determining that the place of supply is in India. Consequently, the services do not qualify as 'export of services' or 'zero-rated supply'. The appeal filed by the Appellant was dismissed.

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