GST on intermediary service

[Kavali Ramanjeneyulu]

One taxpayer located in Hyderabad is providing marketing services as an Intermediary to a Company located in Singapore. As per the Section 13(8) of the IGST act, the place of supply of Intermediary is the location of the Supplier . So , in this case, the place of supply is Hyderabad which is the location of the supplier. In this regard, clarification may please be given as to whether IGST or CGST +SGST is payable on the said intermediary services.

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1 Dated: 7-1-2021
By:- KASTURI SETHI

As per FAQ (serial no.25) issued by CBIC, CGST/SGST is applicable. But in my view, as per Section 7(5) read with Section 8(2) of IGST Act, IGST is applicable inasmuch as FAQ has no statutory force. De facto, services have been received in a foreign country and consumed and enjoyed outside India. So better and safer option is IGST.

2 Dated: 7-1-2021
By:- Kavali Ramanjeneyulu

But as per Section 13(8) of the IGST act, place of supply for Intermediary service is the location of the supplier. And as per section 8 (2) of the IGST act , Subject to the provisions of section 12, supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated as intra-State supply. Accordingly, my view is CGST and SGST is payable as in this case also location of the supplier and place of the supply fall in the same state. Please clarify/comment sir.

AI Summary

Debate on Tax Applicability: IGST vs. CGST+SGST for Intermediary Services Under Section 13(8) of IGST Act A taxpayer in Hyderabad provides marketing services as an intermediary to a Singapore-based company. The query concerns whether IGST or CGST+SGST is applicable, given Section 13(8) of the IGST Act, which states the place of supply is the supplier's location. One expert argues IGST is safer since services are consumed outside India, while another suggests CGST+SGST applies as both supplier and place of supply are in the same state. Other participants agree with the IGST perspective, noting a Gujarat AAR ruling supports CGST+SGST for similar cases. The discussion concludes with gratitude for the insights shared.