GST export of services

[Madhavan iyengar]

Under export of service rules it is mentioned that it wont qualify as export if:

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;”

meaning of above ie if indian company exports to its related unit in foreign country then the unit in foreign country should not be a mere branch it should be a registered entity in the foreign country ie in America the word INC is used in germany Gmbh is used which signifies that they are separate regd entities in foreign countries so that benefit of export is not denied

Experts please clarify on this issue.

AI Summary

Export of services: entitlement depends on recipient being a distinct legal person, not a mere branch or office.
Entitlement to export of services depends on the recipient being a distinct legal person rather than a mere branch or liaison office; corporate suffixes alone do not prove distinctness. The tax authority may demand documentary proof of the recipient's independent registration, and the exporter bears the burden of establishing eligibility for export treatment, though ambiguity in taxing statutes can confer benefit of doubt to the assessee.