2019 (10) TMI 572 - AAR - GST

GST Ruling: Portfolio Management Services for Non-resident Clients in Foreign Currency

The Authority rejected the applicant's claim that Portfolio Management Services provided to Non-resident clients paying fees in foreign currency should be ... Maintainability of Advance Ruling application - scope of Section 97 (2) of the CGST Act 2017 - Levy of GST - Portfolio Management Services provided to Non-resident client, where the client pays fee in foreign currency from their overseas account to the account of the Portfolio manager - HELD THAT:- The question raised by the applicant on which advance ruling has been sought for does not fall under any of the category of Section 97 (2) of the CGST Act 2017 - Further it is an admitted fact that the applicant’s question is related to place of supply and hence it is not a matter on which this authority is empowered to give a ruling. Therefore the instant application is liable for rejection and hence there are no need to go to merits of the case. Issues:Whether GST needs to be charged on Portfolio Management Services provided to Non-resident clients paying fees in foreign currency.Analysis:The applicant, a Private Limited Company registered under the Goods and Services Act, sought an advance ruling on whether GST is applicable on Portfolio Management Services provided to Non-resident clients paying fees in foreign currency. The applicant stated they offer Discretionary Portfolio Management Services approved by SEBI regulations. They manage client funds held in the client's name in a local bank with a Demat account held by a custodian bank. The applicant serves both Resident and Non-resident clients, charging a fee for Portfolio Management services.The applicant referred to IGST Act Sections 12 and 13 for determining the place of supply for services. They highlighted that under Section 13(2) of the IGST Act, the place of supply for services provided to a non-resident client is the location of the recipient of services, which, in this case, is outside India. The applicant emphasized the importance of the location of the service provider and recipient in determining the nature of the supply and place of supply, as defined by the IGST Act.During the personal hearing, the applicant's representative reiterated the facts. The Authority considered the submissions, relevant facts, and the issues raised. They clarified that the provisions of the CGST Act and KGST Act are similar unless specified otherwise. The applicant claimed that the Portfolio Management services to Non-resident clients should be zero-rated as they constitute an export of service due to the place of supply being outside India.The Authority referred to the definition of 'export of services' under the IGST Act and emphasized the importance of determining the place of supply to establish if the services qualify as an export. They analyzed the applicant's question in light of Section 97(2) of the CGST Act, which outlines the issues for seeking advance rulings. The Authority concluded that the question regarding the place of supply did not fall under the categories specified in Section 97(2) and, therefore, the application was rejected.In the ruling, the Authority stated that the question raised did not fall within their jurisdiction for providing an advance ruling, leading to the rejection of the application.This detailed analysis of the judgment highlights the applicant's query, the relevant legal provisions, the Authority's considerations, and the final ruling on the matter.