Marketing Services Agreement classified as intermediary services under HSN Code 9961/9962 not support services under HSN Code 9985

The AAR-Maharashtra classified marketing services under a Marketing Services Agreement as intermediary services under HSN Code 9961/9962 rather than support services under HSN Code 9985. The applicant acted as a conduit connecting GTRS with Indian customers, thereby arranging or facilitating supply between parties, satisfying intermediary conditions. The place of supply was determined as the applicant's Maharashtra location per Section 13(8) IGST Act 2017, making export of services conditions under Section 2(6) unsatisfied.

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Issues Involved:
1. Classification of Marketing Services: Whether the marketing services provided by the applicant fall under 'Support Services' (HSN Code 9985) or 'Intermediary Services' (HSN Code 9961/9962).
2. Export of Services: Whether the marketing services provided by the applicant qualify as an export of services under Section 2(6) of the Integrated Goods and Services Tax Act, 2017.

Issue-wise Detailed Analysis:

1. Classification of Marketing Services:
The applicant, Gulf Turbo Solutions LLP (GTS LLP), proposed to provide marketing services to Gulf Turbo Repairs and Services FZC (GTRS) under a Marketing Services Agreement. The scope of services includes conducting market surveys, assisting in sales prospection, liaising with customers, and providing feedback to GTRS. The applicant contended that these services should be classified as 'Support Services' under HSN Code 9985, arguing that they operate on a principal-to-principal (P2P) basis and not as intermediaries.

However, the Authority observed that the nature of services such as liaising with customers, connecting prospective customers with GTRS representatives, and providing feedback to GTRS indicates that the applicant acts as a conduit between GTRS and its customers. This implies that the applicant is facilitating the supply of goods or services between GTRS and its customers, fitting the definition of an intermediary under Section 2(13) of the IGST Act, 2017. The Authority concluded that the applicant's services fall under 'Intermediary Services' classifiable under HSN Code 9961/9962.

2. Export of Services:
For the marketing services to be considered an export of services under Section 2(6) of the IGST Act, 2017, all conditions must be met, including the place of supply being outside India. The applicant argued that the services provided to GTRS, a company based in Sharjah, UAE, should be treated as an export of services.

The Authority noted that since the applicant is classified as an intermediary, the place of supply for intermediary services is the location of the supplier, which is in India. Consequently, the condition that the place of supply should be outside India is not satisfied. Therefore, the marketing services provided by the applicant do not qualify as an export of services.

Conclusion:
The Authority ruled that the marketing services provided by the applicant constitute 'Intermediary Services' under HSN Code 9961/9962. Additionally, these services do not qualify as an export of services as defined under Section 2(6) of the IGST Act, 2017, because the place of supply is within India.

Order:
1. The marketing services agreed to be provided by the applicant will constitute 'Intermediary Services' classifiable under HSN Code 9961/9962.
2. The marketing services provided by the applicant do not qualify as an export of services under Section 2(6) of the Integrated Goods and Services Tax Act, 2017.

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