Whether NOTIFICATION NO.10/2017-INTEGRATED TAX, DATED 13-10-2017 APPLY to - EXPORT OF SERVICES

[Adarsh singh]

As per Notification No. 10/2017-Integrated Tax dated 13-10-2017, the Government has specified that persons making inter-State supplies of taxable services, having an aggregate turnover not exceeding Rs. 20 lakh in a financial year (computed on an all-India basis), are exempted from obtaining GST registration.

However, the notification states that the aggregate turnover shall be computed on an all-India basis. This raises an interpretational issue as to whether the exemption from mandatory registration applies to all inter-State supplies, or only to inter-State supplies made within India.

Question:

Whether the threshold limit of Rs. 20 lakh is applicable even in case of export of services, and accordingly, whether a person exclusively making export of services with aggregate turnover not exceeding Rs. 20 lakh is not required to obtain GST registration, in terms of Notification No. 10/2017- Integrated Tax dated 13-10-2017? 

Please guide.

[Raam Srinivasan Swaminathan Kalpathi]

Exports are inter-state supplies only.

[Adarsh singh]

That is understood.

My query is

Shall export of services, qualify for exemption provided under said notification? or it cover only those inter state supply which are  made within India.

[Raam Srinivasan Swaminathan Kalpathi]

Inter-state supply definition does not distinguish between made in india or outside india.  That was the gist of my argument.

[Adarsh singh]

Thank you for clarification. 

[Harshit Panjwani]

In my humble opinion, “to be computed on all India basis” referred in the Notification No. 10/2017 – Integrated Tax dated 13th October, 2017, carries the same meaning and terminology as that of “aggregate turnover” as per Section 2(6) of the CGST Act, 2017.

Hence, Export of Services are squarely covered by this Notification and there is no need for GST registration.

[Adarsh singh]

Thank You so such. 

[VENU K]

Since "aggregate turnover" explicitly includes the value of "exports of services," a person exclusively engaged in the export of services would need to include the value of such exports when calculating their aggregate turnover. If this aggregate turnover does not exceed the specified threshold of Rs. 20 lakh (or Rs. 10 lakh for special category States) in a financial year, then such a person is exempted from obtaining GST registration under Notification No. 10/2017-Integrated Tax. This exemption is granted notwithstanding the general requirement for compulsory registration for inter-State taxable supplies under Section 24(i) of the CGST Act, due to the overriding power granted by Section 23(2) of the CGST Act.

My understanding 

[Shilpi Jain]

The "all India basis" referred in the notification is for the turnover of the selling company. It does not in anyway mean the Indian sales turnover.

So even exports will get the exemption as it is the turnover of the Indian seller.

AI Summary

Export of services included in aggregate turnover; exporters below the threshold may be exempt from GST registration. The notification exempts persons making inter State supplies of taxable services from mandatory GST registration where aggregate turnover, computed on an all India basis and including export receipts, does not exceed the prescribed threshold; exporters whose aggregate turnover (including exports) falls below the threshold qualify for the registration exemption despite the general compulsory registration rule for inter State supplies.