REFUND OF ITC AND EXPORT OF SERVICES UNDER GST

[Kush Kalra]

Hello sir, the query is pertaining to export of services in gst...

Our client is a private limited company incorporated in India engaged in software development with name ABC Private Limited, the said company is providing software development services only to another company ABC INC incorporated in USA for which they have a service agreement, The company ABC private Limited has 2 directors living in India, while the company ABC INC has there son as director living in USA.. Now under export of services rules, 5th condition, the supplier and recipient should not be merely establishment of distinct person read with explanation 1 to section 8 for qualification as export... All the 4 other conditions for export are being qualified...

The following questions arise:

1) Will these services provided by Indian company be treated as export of services..

2)Will both the establishment in India and outside India be considered as establishment of same person and these 2 entities be considered as distinct person under explanation 1 to section 8 and accordingly will not be considered as export..

3) Will the entities be treated as related parties or same person as initial names of both are same ABC Private Limited and ABC INC..if so what will the impact on categorization as export of services

4) The Indian company is also paying consultancy charges to son living in USA on which TDS is being deducted, does this impact the export of services ....

5) Can the Indian company apply for GST Refund for export under LUT, if these are categorized as export of services ...

AI Summary

Indian Company's Software Services to US Firm Qualify as Exports Under GST, Despite Familial Ties and Similar Names A query was raised regarding the export of services under GST by an Indian company, ABC Private Limited, providing software development services to a US-based company, ABC INC. The main concern was whether these services qualify as exports under GST rules, given the directors' familial ties and similar company names. The responses clarified that the Indian and US entities are separate legal entities under GST law, thus qualifying the services as exports. The consultancy payments to a director in the US do not impact this classification. Consequently, the Indian company can apply for a GST refund under LUT for these exports.