Export of Services

[Sanjeev Sharma]

As per Section 2(6) of IGST Act, “Export of services” means the supply of any service when,–– (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8;

In view of above if services provided to overseas branch would not be eligible as export of services due to specific exclusion for such transactions in the definition of “export of service”.

Will this sale to Overseas branch be liable for GST Payment or be treated as non-taxable supply and why.

[Kishan Barai]

In my view exports would be never chargeable to GST if the exporter has exported the goods or services under custom valuationrule 3 where it states that "Buyer and seller are not related and the valuation of goods sold is on a commercial basis".

[Rajagopalan Ranganathan]

Sir,

As per Section 7 (5) (a) of IGST Act, 2017 "Supply of goods or services or both when the supplier is located in India and the place of supply is outside India shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce.

In view of the above provision supply of service to your overseas branch will be treated as inter-state supply and leviable to IGST.

[Himansu Sekhar]

It is not an export of service and accordingly igst is payable

AI Summary

Export of services exclusion for overseas branches makes such transactions inter-state supplies and liable to IGST. Services to an overseas branch do not qualify as export of services because the definition requires the supplier and recipient not be merely establishments of a distinct person; such supplies are therefore treated as inter state supply when the supplier is in India and the place of supply is outside India, making IGST payable.