Export of procurement and IT services

[Shrikanth Parmarthy]

Dear Experts,

Need your advice on the following:

Facts of the case

1. Our company is providing the following services to the group company in Australia based on agreement

a. Procurement support services- such as support in purchase order processing and development and implementation of procurement practices etc. The designated employees of Indian entity for rendering these services are working from home from India where they provide these services to Australian Entity

b. Information Technology (IT) support services where an designated Indian employee available in Indian payroll with laptop will be working from home in India and provides IT support to Australian company.

c. Account receivable service where a designated employee sits at Indian office and provides support accounts receivable support to Australian Entity

The invoice raised to Australian company is on the basis of cost plus markup.

Queries:

1. Can the above services be treated as export of services as they satisfy the following conditions:

a. Supplier is within India

b. Receiver is outside India and

c. Place of supply of service is location of receipient as they are not covered in any specific category in section 13 of IGST act.

AI Summary

Export of services: cross border IT, procurement and accounts receivable support qualify as zero rated supplies under GST.
Procurement support, IT support and accounts receivable services provided from India to an Australian group company fall within Section 13(2) (place of supply: recipient location) and, having met the remaining conditions of Section 2(6) (supplier in India; recipient outside India; payment in convertible foreign exchange or permitted rupees; distinct legal persons), qualify as export of services and therefore as zero rated supplies under Section 16, permitting supply under a Letter of Undertaking or payment of IGST with refund claim.