Research services for holding companies classified under HSN 99859, market information under HSN 99837, qualifying as service exports under Section 2(6) IGST Act 2017.

AAR Maharashtra ruled on classification of services provided by an applicant under two agreements. The Authority held that research services related to holding company functioning (corporate accounting, finance, personnel relations, R&D, quality assurance, intellectual property) classify under HSN code 99859 as support services. Market information services classify under HSN code 99837 as market research services. The services were deemed independent contractor arrangements, not intermediary services under HSN codes 9961/9962, as no principal-agent relationship existed and applicant had no authority to conclude contracts or negotiate orders. Services under Marketing Services Agreement qualified as export of services under Section 2(6) IGST Act 2017, meeting all required conditions including foreign recipient, convertible foreign exchange payment, and place of supply outside India.

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Issues Involved:
1. Classification of services under the Service Agreement dated 1 March 2013.
2. Classification of services under the Marketing Services Agreement dated 1 December 2012.
3. Determination of whether the services provided constitute an export of services under Section 2(6) of the Integrated Goods and Services Tax Act 2017.

Detailed Analysis:

Issue 1: Classification of Services under the Service Agreement dated 1 March 2013
Facts and Contentions:
- The applicant provides various services to Asahi Japan under a Service Agreement, including research on corporate functions, market surveys, and providing economic, industrial, and technical information.
- The applicant contends that these services should be classified as "Support services" under HSN code 9985 rather than "Intermediary services" under HSN code 9961/9962.

Analysis:
- The agreement specifies that the applicant acts as an independent contractor, not as an agent or broker, and does not have authority to conclude contracts or negotiate on behalf of Asahi Japan.
- The definition of "intermediary" under Section 2(13) of the IGST Act includes a broker or agent who arranges or facilitates the supply of goods or services between two or more persons but excludes those who supply such goods or services on their own account.
- The applicant's activities, such as research and market surveys, do not involve arranging or facilitating supplies between two parties, thus failing to meet the criteria for "intermediary services."
- The services provided by the applicant are classified under "Other support services" (HSN code 99859) and "Market research services" (HSN code 99837).

Conclusion:
- The services provided under the Service Agreement are classified as "Other support services" (HSN code 99859) and "Market research services" (HSN code 99837).

Issue 2: Classification of Services under the Marketing Services Agreement dated 1 December 2012
Facts and Contentions:
- The applicant provides marketing services to various Asahi Kasei group companies, including market surveys, assisting in advertising, liaising with customers, and providing feedback to improve marketing.
- The applicant contends that these services should be classified as "Support services" under HSN code 9985 rather than "Intermediary services" under HSN code 9961/9962.

Analysis:
- The Marketing Services Agreement specifies that the applicant acts as an independent contractor and does not have authority to negotiate or conclude contracts on behalf of the service recipient.
- The applicant's role is limited to providing market support and facilitating business activities without acting as an intermediary.
- The services provided, such as market surveys and assisting in advertising, are classified under "Market research services" (HSN code 99837).

Conclusion:
- The services supplied under the Marketing Services Agreement are classified as "Market research services" (HSN code 99837).

Issue 3: Determination of Export of Services
Facts and Contentions:
- The applicant receives payment in freely convertible foreign exchange and contends that the services provided qualify as an export of services under Section 2(6) of the IGST Act.

Analysis:
- The definition of "export of services" under Section 2(6) of the IGST Act requires that the supplier is located in India, the recipient is located outside India, the place of supply is outside India, payment is received in convertible foreign exchange, and the supplier and recipient are not merely establishments of a distinct person.
- The applicant meets all these conditions: the supplier is in India, the recipient is outside India, payments are received in convertible foreign exchange, and the supplier and recipient are distinct legal entities.

Conclusion:
- The services provided by the applicant qualify as an export of services as defined under Section 2(6) of the IGST Act.

Order:
Question 1:
- The services provided under the Service Agreement dated 1 March 2013 are classified as "Other support services" (HSN code 99859) and "Market research services" (HSN code 99837).

Question 2:
- The services supplied under the Marketing Services Agreement dated 1 December 2012 are classified as "Market research services" (HSN code 99837).

Question 3:
- The services provided by the applicant constitute an export of services as defined under Section 2(6) of the IGST Act.

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