Export of service

[Kaustubh Karandikar]

XYZ, Belgium had exported the goods to a customer in West Bengal, India. Subsequently, some repair was required to be carried out on these goods. On the instructions of XYZ, Belgium, PQR, India had carried out these repairs at West Bengal and amount for the same was recovered from XYZ, Belgium. Is PQR required to pay GST on amount recovered from XYZ. Sir, in my view it will fall under Section 13(3) and since the service is performed in India, PQR is liable to pay GST. Kindly confirm.

[ABHISHEK TRIPATHI]

Dear Kaustubh Sir,

Under OIDAR?

[ABHISHEK TRIPATHI]

Sorry, ignore the previous one*

[Ganeshan Kalyani]

Sir, in my view it is export of service.

[Atul Mehrotra]

Sir.

Section 13(3)(a) would be applicable only if the goods are put to use in India. However, if the goods the exported after carrying out repair, then the 2nd proviso would come into play, which reads as under:

Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs or for any other treatment or process and are exported after such repairs or treatment or process without being put to any use in India, other than that which is required for such repairs or treatment or process;

[Rajagopalan Ranganathan]

Sir,

With due respects, I differ from the views expressed by Shri. Atul Mehrotra for the following reasons:-

The repaired goods are not exported but remain within the taxable territory (that is, India). Therefore the place of supply of service is India. Therefore though PQR had received the service charges in freely convertible foreign currency the service is provided in India and hence PQR is liable to pay gst either CGST and SGST or IGST depending the supply is intra-state or inter-state.

AI Summary

Place of supply determines GST liability for repair services in India; exemption applies if goods are temporarily imported and re exported. Taxability of repair charges depends on place of supply and whether goods were temporarily imported for repair and exported thereafter without being put to use in India; if goods are treated as temporarily imported and exported after repair, the proviso excludes the service from domestic supply and supports export of service treatment, whereas if the goods are deemed used or remain in the taxable territory the repair service is a taxable supply in India and GST must be remitted accordingly.