Appellate Authority Confirms Tax Classification for Professional Services

The Appellate Authority upheld the lower Authority's decision in the case, confirming that the services provided by the Appellant are classified as "Other professional, technical and business services" under Service Code 9983.11 and are considered intermediary services. The Appellant was deemed required to register under the CGST Act, 2017, and the services rendered are subject to tax at specified rates for intra-State and inter-State supplies. Additionally, the time and value of the supply are to be determined as per the provisions of the CGST Act, 2017. The appeal filed by the Appellant was dismissed in its entirety.

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Issues Involved:
1. Classification of services rendered by the Appellant.
2. Requirement of registration under the CGST Act, 2017.
3. Tax liability on the services rendered.
4. Time and value of the supply of services.

Detailed Analysis:

Classification of Services Rendered:
The primary issue is the classification of the services provided by the Appellant to H-J Family of Companies. The lower Authority classified the service under Service Code 9983.11 as "Other professional, technical and business services," specifically as an intermediary service. The Appellant contended that the services should be classified under "Market research and public opinion polling services" (Service Code 998371) and not as intermediary services. The Appellate Authority upheld the lower Authority's classification, noting that the Appellant facilitates the sale of products through sales presentations, which falls under the definition of an intermediary as per Section 2(13) of the IGST Act.

Requirement of Registration:
The lower Authority ruled that the Appellant is required to be registered under the CGST Act, 2017. This decision was based on the classification of the services as intermediary services, which necessitates registration due to the nature of the supply. The Appellate Authority upheld this requirement, affirming that the services provided by the Appellant necessitate registration under the Act.

Tax Liability on Services Rendered:
The lower Authority determined the applicable tax rates for the services provided by the Appellant:
- Intra-State Supply: 9% under CGST and 9% under KGST.
- Inter-State Supply: 18% under the IGST Act.
The Appellant argued that the services should be considered as export of services and thus zero-rated. However, the Appellate Authority confirmed that the services are intermediary services, which are taxable and do not qualify as export of services.

Time and Value of Supply:
The lower Authority stated that the time of supply would be determined as per Section 13(2) of the CGST Act, 2017, and the value of supply would include the amount received by the Appellant and any reimbursed expenses. The Appellate Authority upheld this determination, agreeing with the lower Authority's interpretation of the provisions regarding the time and value of supply.

Conclusion:
The Appellate Authority upheld the Advance Ruling No KAR/ADRG 64/2019, confirming that:
1. The services provided by the Appellant are classified under Service Code 9983.11 as "Other professional, technical and business services" and are intermediary services.
2. The Appellant is required to be registered under the CGST Act, 2017.
3. The services rendered are subject to tax at the rates specified for intra-State and inter-State supplies.
4. The time and value of the supply are to be determined as per the provisions of the CGST Act, 2017.

The appeal filed by the Appellant was dismissed on all counts.

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