Photography service provider's export application rejected due to jurisdictional limits under IGST Act Section 8(2)

The AAAR Maharashtra ruled on a photography service provider's application regarding export of services on diamonds. The AAR had initially held that photography services performed on diamonds in Maharashtra constituted intra-state supply under Section 8(2) of IGST Act, 2017, as the service location and supplier were both in Maharashtra. The AAR further determined the supply did not qualify as zero-rated export under Section 2(6) of IGST Act since place of supply was not outside India and parties were establishments of the same distinct person. However, the AAAR ultimately held it lacked jurisdiction to determine place of supply questions, as such determinations fall outside the scope of advance ruling authority powers, rendering no ruling possible on the applicant's questions.

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Issues Involved:
1. Applicability of CGST and SGST or IGST on the supply of photography services.
2. Determination of whether the supply qualifies as an export of services.

Issue-wise Detailed Analysis:

1. Applicability of CGST and SGST or IGST on the supply of photography services:

The Appellate Authority for Advance Ruling (AAAR) examined whether Segoma Imaging Technologies India Pvt. Ltd. (Segoma India) should charge CGST and SGST or IGST on its photography services. The AAAR noted that the determination of the place of supply is crucial to decide the nature of the tax levy. According to Section 13(3)(a) of the IGST Act, the place of supply for services involving goods physically made available to the service provider is the location where the services are performed. The AAAR observed that since the diamonds are physically made available in Maharashtra, the place of supply is Maharashtra. Therefore, the supply is considered an intra-state supply, attracting CGST and SGST.

However, the AAAR highlighted that the determination of the place of supply is beyond its jurisdiction as per Section 97(2) of the CGST Act, which does not cover questions regarding the place of supply. Consequently, the AAAR concluded that it could not pass a ruling on the applicability of CGST and SGST or IGST for the photography services provided by Segoma India.

2. Determination of whether the supply qualifies as an export of services:

The AAAR also addressed whether the photography services provided by Segoma India qualify as an export of services under Section 2(6) of the IGST Act. The conditions for export of services include that the place of supply must be outside India and the supplier and recipient should not be merely establishments of a distinct person. The AAAR noted that the place of supply is within Maharashtra, and Segoma India and Segoma Israel are considered distinct persons, as they operate on a principal-to-principal basis.

However, since the determination of the place of supply is beyond the AAAR's jurisdiction, it could not definitively rule on whether the services qualify as an export. The AAAR emphasized that the Advance Ruling Authority should not have passed any ruling on these questions, as they involve the determination of the place of supply, which is outside its scope.

Order:

The AAAR quashed the impugned ruling passed by the Advance Ruling Authority, stating that the questions asked by the appellant are not covered under its scope and jurisdiction. Therefore, no ruling can be passed on the applicability of CGST and SGST or IGST and whether the supply qualifies as an export of services.

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