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of <h1>Foreign vessel support services at Indian ports classified under SAC 9967, taxable at 18% GST, not export services</h1> <h3>In Re: M/s. Translog Direct Private Limited.</h3> In Re: M/s. Translog Direct Private Limited. - TMI Issues Involved:1. Classification of specified services under SAC 9985 of Notification No. 11/2017-Central Tax (Rate) dated June 28, 2017.2. Determination of whether the specified support services qualify as export of services.Issue-wise Detailed Analysis:1. Classification of Specified Services:The applicant sought to classify their services as 'support services' under SAC 9985. They proposed to provide end-to-end support services to overseas shipping lines/charterers, including handling registration, coordinating port activities, managing documentation, and attending to crew matters. The applicant argued that these services should be classified under SAC 9985, specifically under 'Support services other than (i) and (ii) above' as per Notification No. 11/2017-Central Tax (Rate) dated June 28, 2017.Upon examination, the authority found that the services proposed by the applicant, such as berth hire services, lighthouse dues, customs/documentation, husbandry services, and survey/launch hire services, are related to the vessel's operations at Indian ports. These services are more aptly classified under SAC 9967, which covers 'Supporting services for water transport (coastal, transoceanic, and inland waterways),' including port and waterway operation services, pilotage, berthing services, and other supporting services for water transport. Therefore, the authority ruled that the services should be classified under SAC 9967 and are liable to CGST @ 9% and SGST @ 9% as per SI.No. 11(ii) of Notification No. 11/2017-C.T.(Rate) dated 28.06.2017.2. Determination of Export of Services:The applicant also sought a ruling on whether their support services would be considered as export of services. According to Section 2(6) of the IGST Act, 2017, export of services must meet five conditions: the supplier must be located in India, the recipient must be located outside India, the place of supply must be outside India, payment must be received in convertible foreign exchange, and the supplier and recipient must not be merely establishments of a distinct person.The authority noted that the applicant is located in India, the recipient is located outside India, and payment is to be received in convertible foreign exchange. However, the critical condition to be examined was whether the place of supply is outside India. According to Section 13(3) of the IGST Act, the place of supply for services related to goods that are physically available in India is the location where the services are actually performed. Since the proposed services are related to vessels present in Indian territorial waters, the place of supply is within the taxable territory of India. Therefore, the authority concluded that the proposed services do not qualify as export of services because the place of supply is not outside India.Ruling:1. The applicant's services are classified under SAC 9967 and are liable to CGST @ 9% and SGST @ 9%.2. The proposed services do not qualify as export of services under Section 2(6) of the IGST Act, 2017, as the place of supply is within the taxable territory of India.
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