Export of service

[Kaustubh Karandikar]

PQR, is based in the USA and XYZ is based in India.

XYZ shall market and promote the Products of PQR in the territory of India as well as outside India., as authorized by PQR.

Scope of the above marketing and promotion is as given below:

For marketing and promotion of the Products within and outside India.

For disseminating information about products, payments and booking conditions and terms of trade.

For performing collections services, as may be required, for PQR sales in the territory.

PQR shall annually pay an aggregate fee equal to 115% of Operating Costs of XYZ.

Is XYZ liable to pay GST on this transaction?

AI Summary

Place of supply rules: intermediary services by an Indian agent to a foreign principal may be treated as taxable under GST.
The core dispute is whether fees paid by a foreign principal to an India based agent for marketing, promotion and collection services qualify as intermediary services and, if so, whether Section 13(8)(b) - fixing place of supply at the supplier's location in India - renders the transaction non export and taxable under GST, versus the opposing view that such services fall outside inter state and intra state supply and are not taxable under current GST law.