Appellate Authority's Decision on Classification of Services and Export Jurisdiction

The Appellate Authority classified services provided under the Service Agreement and Marketing Services Agreement as mixed supplies falling under specific SAC codes. Regarding the determination of export of services, it was noted that defining the place of supply, a prerequisite for such determination, falls beyond the jurisdiction of the Advance Ruling Authority. As a result, no ruling was made on the export of services due to jurisdictional limitations. The Appellate Authority modified the decision of the Advance Ruling Authority accordingly.

---

---

Issues Involved:

1. Classification of services supplied under the Service Agreement dated 1 March 2013.
2. Classification of services supplied 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 Service Tax Act 2017.

Detailed Analysis:

Issue 1: Classification of Services under the Service Agreement dated 1 March 2013

The Respondent provided various services to its parent company, Asahi Kasei Japan, including corporate accounting, finance, personnel and labor relations, research and development, quality assurance, and intellectual property. The services also included providing economic, industrial, and technical information, conducting market surveys, and offering necessary business assistance.

The Appellate Authority concluded that these services are a mixed supply under Section 2(74) of the CGST Act, 2017, as they could be performed separately and independently. The services were classified under:
- SAC 9982 for accounting services.
- SAC 9983 for other professional, technical, and business services.

Issue 2: Classification of Services under the Marketing Services Agreement dated 1 December 2012

The Respondent provided services such as conducting market surveys, assisting in advertising policy implementation, participating in industry events, liaising with customers, providing feedback, arranging discussions, and monitoring regulatory developments.

The Appellate Authority classified these services as a mixed supply under:
- SAC 9981 for Research and Development services.
- SAC 9983 for other professional, technical, and business services.
- SAC 9997 for other miscellaneous services.

Issue 3: Determination of Export of Services

The Advance Ruling Authority initially ruled that the services provided by the Respondent constituted an export of services under Section 2(6) of the IGST Act, 2017. However, the Appellate Authority found that determining the place of supply, a prerequisite for defining export of services, is beyond the jurisdiction of the Advance Ruling Authority as per Section 97(2) of the CGST Act.

Conclusion and Order:

1. Service Agreement dated 1 March 2013: The services constitute a mixed supply falling under SAC 9982 and SAC 9983.
2. Marketing Services Agreement dated 1 December 2012: The services constitute a mixed supply falling under SAC 9981, SAC 9983, and SAC 9997.
3. Export of Services: No ruling was passed regarding the export of services due to jurisdictional limitations on determining the place of supply.

The Appellate Authority modified the Advance Ruling Authority's decision accordingly.

---