GST - Intermediary

[Madhavan iyengar]

dear all readers and experts

Please share views on circular issued on intermediary services 18/07/2019 107/26/2019-GST

i am putting down some points so that it can be taken forward by panel

5.2 scenario -II does this mean a manufacturer in India who exports goods and for this purpose if he engages a logistic company and all transportation services are undertaken by the manufacturer through the logistic company in India from factory to port and onwards till destination say Brazil and when he invoices for goods he includes all costs and exports them

in above scenario will the manufacturer exporter be called as intermediary for the logistic services performed through logistic company for export from India till brazil and thus be liable for tax on the services

AI Summary

Intermediary status lost when supplier invoices principal service costs; inclusion of costs indicates supply on own account, not intermediary.
A manufacturer-exporter who invoices buyers inclusive of logistics costs cannot be an intermediary because the IGST Act excludes persons who supply goods or services on their own account; intermediaries are limited to arranging or facilitating supplies and receive commission only, whereas charging principal service costs indicates supply on one's own account.