Place of provision of services

[Madhavan iyengar]

A Company in India has received order to develop a proto type from a foreign vendor

The Indian Company uses its own material and develops the prototype at its plant in india.

Foreign vendor agrees to compensate for eng services work done on prototype by indian company

Indian company raises invoice for engineering services on Foreign vendor in USD

Can the Invoice raised for engineering services qualify as export of services ( since all conditions will be satisfied ) whether there can be any issue on POPS

AI Summary

Place of supply of services determines export treatment: recipient-location may permit zero rating despite performance in India.
Export classification depends on satisfying export conditions, notably that the place of supply is outside India. If supplier and recipient locations, foreign exchange receipt, and independence of establishments are met, statutory place-of-supply rules point to export treatment; however, the fact that services are physically performed in India creates a revenue risk and makes the issue fact-sensitive and debatable, warranting reliance on authoritative rulings.