TaxTMI 
TaxTMI 
2018 (7) TMI 1182
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.... the alternate, where services are provided to foreign ship owners distinctively as supply of consultancy service and support service with separate and demarcated fees for their consultancy service and for support service: a. Whether consultancy service will qualify as business consultancy service in terms of the scheme of classification of services [Annexure to Notification 11/ 2017 - Central Tax (Rate), dated 28th June, 2017? b. Whether the place of supply of such consultancy service will be the 'location of recipient of service' in terms of Section 13(2)(a) of the IGST Act? c. Whether support service qualifies as "intermediary service" in terms of Section 2(13) of the IGST Act? And, if ruled that the support service qualifies as an intermediary service, the place of supply of support service as intermediary service will be the 'location of supplier of service' in terms of Section 13(8)(b) of the IGST Act? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also....
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....ity movement, port congestion, global and regional economic development and analysis viii. Techno commercial assessment of vehicle type utilization opportunities, infrastructure development in various regions, geographical impact on global trade in bulk commodities arising from weather, piracy, war, conflict, any other causes which have prospects to impact trade 4. Fees for the abovementioned services is fixed pre-hand, and typically is a percentage of the gross revenue earned and received by the foreign/ Indian ship owner as the case may be. A sample Consultancy Agreement dated 01 March, 2017 entered between the Applicant and foreign ship owner Singapore Shipping International Pte. Ltd. ("the Agreement") is attached as Enclosure 1. The tax position, as applicable under the erstwhile (pre-GST) regime must be appreciated and understood in the context of these facts and commercial circumstances to enable a considered conclusion under GST regime and law. Tax treatment prior to GST 5. The Applicant had obtained Service Tax registration as per the erstwhile indirect tax regime in the State of Maharashtra. MCS service provided by the Applicant to foreign ship owners and India....
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....ith each other in the ordinary course of business, one of which is a principal supply;". 9. Section 2(74) of the CGST Act defines the term 'mixed supply' to mean "two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply". 10. In terms of Section 2(13) of the Integrated Goods and Services Tax Act, 2017 ("IGST Act") defined 'intermediary' to mean "a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account" 11. In terms of Section 2(6) of the IGST Act, export of services means "the supply of any service when. (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange; and (v) t....
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....tationed at its office who keep them abreast with market trends and help the foreign ship owners with valuable information re their business. The Applicant has appointed research analysts on the payroll to undertake market research, track, collate, analyse and monitor port development and logistics data to update future trends to ship owners and also customise this information as per the customer's needs e.g. the type of vessel, cargo carrying capacity, free space available on the board of the vessels. 2. MCS supplied by the Applicant also includes support service provided to the foreign ship owners which largely consists of optimising global trade and revenue therein for the foreign ship owner. For this, the Applicant relies on the database of information maintained by the Applicant. Further, the support service supplied by the Applicant includes monitoring voyage execution for the ship owners for smooth and efficient operations to optimize performance of their ships, examines lay time calculations, and arranges for reconciliation of accounts with the objective of eventual settlement with the charterers. The support services provided by the Applicant are provided to the foreign....
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....o the contact for supply of MCS. Consequently, a significant as also certain degree of service is provided by the Applicant directly to and quite clearly directed at the foreign ship owner. 7. The services supplied by the Applicant are described in para 3 of Annexure I and may be refereed to understand that the entire gamut of services supplied by the Applicant. Each service listed therein may be provided by the Applicant in isolation and there is no requirement to avail all the services supplied by the Applicant and it is the ship owner's prerogative to avail all or some of the services offered by the Applicant. It is on the request of the foreign ship owners that the services arc supplied in a cohesive manner, as a single offering. Typically, the Applicant is equipped to supply consultancy service and support service distinctly and occasionally does provides the services separately. However, it is practical for the foreign ship owner to avail both services offered by the Applicant as a bundle to increase effectiveness and for cost economies. Provision of consultancy service by the Applicant helps the foreign ship owner to zero in on a suitable charterer, which in turn leads to....
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....ntelligence on commodity shipping and freight market, track movement of ships, maintain information about the ports and the facilities provided the ports, monitor trade pattern and disseminate the information to foreign ship owners. MCS constitutes consultancy service provided to foreign ship owners as a specialist in the freight market and support service provided to the mtomonitor voyage execution, examine lay time calculations, etc. These services are provided in conjunction and as a bundle by the Applicant which in turn augments the capacity of foreign ship owners to serve clients globally. Supply of MCS is not a mixed supply 12. When two or more individual services are supplied in conjunction with each other for a single price and where such supply does not qualify as a composite supply, such supply is classified as a mixed supply. From the discussion in the foregoing para of this application, it is evident that consultancy service and support service supplied by the Applicant is naturally bundled and are supplied in conjunction in the ordinary course of business. Consequently, given that Applicant's service qualifies as a composite supply of service, the service does no....
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....y the Applicant to the foreign ship owner is an export of service. MCS does not qualify as an intermediary service 16. In mode of assumption, if support service provided by the Applicant to the foreign ship owner is seen as a principal supply, support service cannot be an intermediary service and therefore MCS in entirety cannot be an intermediary service. 17. Supply of support service as a part of the MCS by the Applicant is not an intermediary service in terms of Section 2(13) of the IGST Act, extracted below: Section 2(13) "intermediary" means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account;" 18. When the Applicant is providing support service under MCS, one may perceive support service as an intermediary service because (a) the applicant is engaged in identifying and then suggesting a potential charterer for the foreign ship owners; and (b) Revenue from MCS service supplied by the Applicant is earned upon successful completion of ....
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....ply of service. The foreign ship owners may decide not to provide service to any of the charterers recommended by the Applicant. The Applicant is neither arranging nor facilitating the supply of service between the foreign ship owner and the charterer. The role ends at the time of introduction of two parties (i.e. foreign ship owner and the charterer) and resumes once an agreement is signed between them, to ensure smooth voyage and settlement of payment. The supply of service by the Applicant is on its own account and directly to the foreign ship owner. Applicant has neither the wherewithal, nor the intent to deal with the charterer. 22. The contract between the foreign ship owner (located outside India) and the charterer (located outside India) is negotiated by electronic means and executed outside India. The Applicant is involved by the foreign ship owner only at the stage of execution of the services (contractually agreed between the foreign ship owner and the charterer) in order to support the foreign ship owner in smooth provision of its service. 23. The essential elements of a supply to qualify as an intermediary service in terms of the definition of 'intermediary' in t....
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....ided on own account and its service is the key service or main service. The fee of Applicants' service is based on an agreed percentage of the supply of service between the foreign ship owner and the charterer however, this cannot be the sole reason to characterize an Applicant's service as an intermediary service. True nature of an agreement is to be determined, to understand the underlying transaction Hindustan Shipyard Ltd vs. State of Andhra Pradesh /2000/ 119 STC 533. 24. The support service provided by the Applicant does not meet the criterion discussed above. These criteria must be satisfied to classify a service as an intermediary service, in absence of which the support service provided by the Applicant to the foreign ship owner will not qualify as an intermediary service. By reference to the scheme of the GST law, the supply of service by the Applicant would be MCS constituted of consultancy service and support service (and not intermediary service), whereby consultancy service is the principal supply. In absence of consultancy service, the foreign ship owners do not engage with the Applicant for provision of support service to the ship owners even though it may be ....
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....nt to the foreign ship owner was treated as export of service in terms of Rule 3(iii) of the Export of Service Rules, 2005 ("Export Rules") subject to the following requirements: MCS is provided in relation to business or commerce, such taxable service shall be treated as export of service if the following conditions are satisfied: (i) Provision of such service must be to a recipient located outside India; and (ii) Payment for such service is received by the service provider inconvertible foreign exchange If the recipient of taxable service has any commercial establishment or any office relating thereto in India, the taxable service shall be treated as export of services only if the order for provision of such service is made by the recipient of such service from any of his commercial establishment or office located outside India. 29. The Applicant was providing MCS to a foreign ship owner located outside India and the payment for provision of service was received by the Applicant in convertible foreign exchange. Therefore, MCS provided by the Applicant to foreign ship owner qualified as export of service in terms of the Export Rules and no service tax was applicable....
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.... (f) the provider of service and recipient of service are not merely establishments of a distinct person in accordance with item (b) of Explanation 3 of clause (44) of section 65B of the Act 33. Therefore, the position adopted by the Applicant in terms of the extant GST law is in line with the position of the Applicant under the erstwhile law. This has been disclosed by the Applicant and accepted by the tax authorities in the service tax returns filed by the Applicant up to June 30, 2017. II. Separate invoicing for consultancy service and support service 34. Assuming that support service provided by the Applicant is construed as supply of intermediary service, supply of entire MCS by the Applicant should not be treated as intermediary service. 35. MCS provided by the Applicant comprises of consultancy service and support service and the Applicant is able to separately allocate value for each service supplied under MCS, raise separate invoice and account for each service separately. If support service provided by the Applicant is construed as intermediary service, the entire revenue from MCS sh....
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....eas consultancy service will continue to be outside the ambit of GST, in view of the applicable place of supply rule i.e. Section 13(2)(a) of the IGST Act, which is outside India. Prayer 40. In view of the factual matrix in the Applicant's case and the extant legal provisions, the Applicant seeks an Advance Ruling from this Hon'ble Authority in respect of the composite supplies of MCS by the Applicant to foreign ship owners." Submission dt.02.04.2018 The Applicant makes the following submissions, which are being made without prejudice to, and is to be read along with the submissions made in the ARA, and at with submissions made during the hearings. FACTS AND BACKGROUND 1. The Applicant is engaged in the supply of comprehensive Marine Consultancy Service ("MCS",) consisting of two elements i.e., Consultancy Service and Support Service. This AAR concerns only supplies made to overseas clients and is accordingly Limited and worded. MCS service of the Applicant is provided to the Foreign Ship Owners ("FSO") who wish to have and therefore seek out potential employment (charterers) for their vessels. Entire engagement between the Applicant and FSO is on principal to pri....
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....ding potential charterers. Thus, the Consultancy service provided by FSO in tune helps the FSO to augment its business and expand its client base and all these services are provided as one service. 3.2 Support services provided by FSS to FSO (client) is usually at the end of the employment of vessel and involves FSS monitoring voyage execution, examining the lay time calculations and arranging for reconciliation of accounts to crystalize receivables of FSO. Occasionally, support may involve postal or ministerial acts of transmitting messages between FSO and charterer. 3.3. Both Consultancy service and Support service are together provided, and Applicant does not offer these independently or separately and so has a comprehensive agreement and fee. 4. Manner of supply of MCS 4.1. While supplying the abovementioned services, Applicant and FSO converse, appreciate data, evolve best consumer strategy for employment of vessel. Typically, the Applicant is continuously studying/ analyzing the freight market and trade development across the world, On the basis of this analysis, the Applicant reaches out to FSO who have idle vessels and are looking out for charterers to provide s....
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....nly then has all contractual obligations of Applicant been completed. 6As per the ever evolving and highly competitive industry, fees are payable upon conclusion of the contract i.e., it is paid upon the agreed additional support services, lay time calculations, etc. being provided to FSO by FSS. As an industry and market practice, fees is a percentage of revenue, which has been contractually agreed between the FSO and the Charterer. This arrangement is premised on concept of value added service i. E. 'no contract' will result in 'no fee ' . From another perspective, contingent fee is evolving globally as a payment structure/ terms like for consultancy and cost reduction assignments and factors in risk for Applicant (Service Provider).Such payment timing, i.e. upon full completion of agreed activities is the basic law of commission. ISSUES TO BE CONTEMPLATED UNDER ADVANCE RULING APPLICATION 7. Given the above background and in context of question posed, the following notable features of the contractual arrangement of the Applicant with the FSO are: i. The MCS supplied by FSS is a "composite supply" (similar to bundled service in the erstwhile regime) with consultancy servi....
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....'naturally bundled service' under the erstwhile negative list regime. Applicant is supplying various services to the FSO (refer paragraph 3 above). These services consisting of Consultancy service and Support service is provided is provided together to the FSO in conjunction as one bundle of service. Conjunction means "condition of being joined ". MCS supplied by the Applicant is joined together where Consultancy service is provided at the time of initiation of service by the Applicant to the FSO and Support service is provided at the end of supply at the time of completion of employment of the FSO by the charterer. No FSO separately seeks provision of Support service, MCS has evolved over a period of time and Support service is typically provided as value addition to the FSO. Consultancy service in the ordinary course of business is provided in combination with Support service, this is indicated by the industry practice. 11 . One of the service provided by the Applicant amidst the gamut of service is the principal supply or the main/ primary supply. In case of the Applicant, the principal or the primary supply by the Applicant is the Consultancy service which helps the FSO to i....
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....ing latest technology and methods. More than domestic industry, Applicant has to compete on global platform to international standards to meet FSO requirements. • One service is the main service and other services provided in the bundle are incidental or ancillary to the main service. As discussed above, Consultancy service provided by Applicant to FSO expands its business viability and profitability. FSO's advice on vessel positioning, bunker trends, commodity market, etc. helps FSO to reach out to potential charterers which is the main objective of FSO's business Once FSO enters into a contract with the charterers, FSS is called objective upon to provide Support service in relation to the voyage. Therefore, without Consultancy service FSO will not be able to efficiently contract with potential charterers and provide services and Applicant may not be called upon to provided Support service. • The service recipient pay single price regardless under of the services within the package, Applicant is obliged to provide all services under the Agreement including the Consultancy service and Support service. These services are provided by Applicant to and for pai....
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....ct for the benefit and interest of FSO. 15. In view of the aforesaid facts, MCS service provided by FSS to FSO consisting of consultancy service and Support service for which a unified consideration is charged, qualifies as naturally bundled service supplied in conjunction with each other, one of which (i.e. Consultancy service) is the principal supply. Thus, MCS supplied by FSS to FCO would qualify as composite service. 16. The Applicant in this regard would like to bring to your attention the submission made by State Tax officer ('the officer') before the Hon'ble Authority on March 13, 2018 ('Revenue Submission'). In this Revenue Submission, the Officer has submitted that MCS is a composite supply of service in terms of Section 2(30) of the CGST Act. 17. Contrary to the above contentions, a "mixed supply" is the supply of two or more services made in conjunction with each other by a taxable person for single price where such supply does not constitute a composite supply in terms of Section 2(30) of the CGST Act. As MCS provided by FSS qualifies as composite supply given the discussion and analysis above, this service would not qualify as "mixed supply" in terms of Sectio....
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.... the place of supply of service in such case shall be the location where the services are actually performed. Section 13(3) (a) In such of IGST Act shall is extracted below: "13(3) The place of supply of the following services shall be the location where the services are actually performed, namely:- (a) services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to Provide the services" ii. MCS is provided to FSS is in-turn utilized by the FSO to find a charterer looking for transportation of Goods and this also involves lay time calculation, arranging reconciliation of account and voyage monitoring. Both Consultancy service and Support service are intellectual services provided by Applicant from its office with its own resources thereat, who never have to or have in the past to deal with vessel of FSO or cargo of Charterer. In no case, the vessel or the cargo transported by the FSO is physically made available by the recipient of service (i.e. FSO) to the provider of service (i.e. FSS), therefore, Section 13(3)(a) of I....
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....rmance-based rule i.e. Section 13(3)(a)of the IGST Act would not apply on this transaction. Therefore, literally as also by Education Guide reference, Section 13(3) of the IGST Act cannot be applied. 20.3. MCS does not qualify under Section 13(8) (b) of the IGST Act i. Section 13(8) (b) of the IGST Act would apply on supply of service which qualifies as 'intermediary service'. an intermediary service in terms of Section 2(13) of the IGST Act, extracted below: "Section 2(13)- "intermediary" means a broker, on agent or any other person, by whatever name called, who arranges or facilitates the supply of woods or services or both, or securities, between two sir more persons. but does not include a person who supplies such goods or services or both or securities on his own account." ii. When the Applicant is providing MCS, it is a composite supply of service wherein Consultancy service is the principal supply. MCS is supplied on P2P basis to and for the FSO and would not qualify as' intermediary service' in terms of Section 2(13) of the IGST Act. Given this, place of supply of MCS will not be determined in terms of Section 13(8) (b) of the IGST Act which provides the 'locati....
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.... No. 148 of the Annexure to the Notification ("other supporting services for water transport nowhere else classified") is the specific entry which provides the appropriate description of activities provided by Applicant and therefore, MCS will be classified therein and leviable to GST at the rate of 18%. General Agreement on Trade in Services 24. To substantiate the submission, reference is made to classification as per Service sectoral classification list of World Trade Organization ('WTO') which classifies MCS service provided by FSS as 'supporting services for maritime transport' (entry 745). Furthermore, the Schedule prescribed under the Served for India Scheme ('SFIS') of Foreign Trade Policy has embraced the classification by the WTO. This Schedule of SEIS scheme also classifies MCS under the category of Maritime Transport Services [supporting services for maritime transport (745)]. Thus, it can be safely concluded that MCS provided by Applicant to FSO would be classified as support services in transport, other than GTA. 25. In the invoice raised by Applicant on FSO which categorizes the supply of service by FSS to FSO as MCS, a copy of which invoice is enclosed as A....
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....NCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- "Submission of NIL date Qs No Question raised by the applicant Submission as per ACT & RULE A.1 Whether Marine Consultancy Service ("MCS") provided to foreign ship owners constitutes "composite supply" with the principal supply of consultancy service? The definition of Composite supply uses the words naturally bundled. This is not defined in GST ACT but was used in Finance Act, 1994 (relating to service tax). Hence, clarifications given under those provisions are relevant. Whether services are bundled in the ordinary course of business would depend upon the normal or frequent practices followed in the area of business to which services relate. Such normal and frequent practices adopted in a business can be ascertained from several indicators of which are listed below:- • The perception of the consumer or the service receiver. If large number of service receivers of such bundle of services reasonably expect such services to be provided as a package then such a package could be treated as naturally bundled in the ordinary course of business. • T....
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....ervice will be the 'location of supplier of service' in terms of Section 13(8)(b) of the IGST Act? Section 2 (13) of IGST Act "intermediary" means a broker, an agent or any other person, by whatever name called, who arrange or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account; 04. HEARING The case was taken up for preliminary hearing on dt.14.02.2018. Sh. Ranjeet Mahtani and Sh. Abhinay Kapoor, both Advocates, duly authorised, alongwith Sh. Jatin Mehta, Accountant appeared and reiterated the contention as made in the written submission. Sh. Ranjeet Mahtani, Advocate orally agreed and requested that his queries with respect to place of supply may not be considered for decision by the Authority. The final hearing was held on dt.13.03.2018. Sh. Ranjeet Mahtani and Sh. Abhinay Kapoor, both Advocates, appeared and made oral and written contentions as per detailed submission made in their application and documents submitted at the time of hearings. Ms. R. S. Iyer, jurisdictional State Tax Officer appear....
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....ENT CHARTER PARTY CONTRACT DATED 3^RD MARCH 2017. The important clauses from this Agreement dt.01.03.2017 could be seen to have an understanding of the issue : WHEREAS 'The Company' desires that the Consultant provide advice and assistance to 'The Company' in their area of expertise; and WHEREAS, the Consultant desires to provide such advice and assistance to 'The Company' under the terms and conditions of this Agreement; 1. Consultine Services (a) 'The Company' hereby appoints Consultant as a consultant and technical advisor to perform the consulting services specifically set out in Exhibit A attached to this Agreement and made a part hereof (hereafter referred to as the "Services"), as said Exhibit may be amended in writing from time to time, and Consultant agrees, subject to the terms and conditions of this Agreement, render such Services during the term of this Agreement. Such services shall be limited to the area of expertise described in Exhibit A, as amended in writing form time to time. Consultant shall render services hereunder at such times and places as shall be mutually agreed by 'The Company' and Consultant. (b) It is understood that the purpose of the C....
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....ue ("Gross Revenue" meaning the freight, dead freight and demurrage received under contracts fixed through the Consultant). 'The Company' shall not reimburse Consultant for any travel or other out of pocket expenses Consultant incurs in connection with performing the Services. `The Company' shall endeavor to pay to Consultant invoiced amounts within thirty (30) days after the date of invoice or successful execution & completion of assigned contract whichever is later. 4. Duties of The Consultant The Consultant shall, while this Agreement is in force or until the satisfactory completion of the Assignment, devote such of his time, attention and abilities to the Assignment as may be necessary for the satisfactory completion thereof as the same shall be determined by 'The Company'. The Consultant agrees to advise and assist `The Company' as required in accordance with their Technical & Professional ability with respect to all aspects in the performance of such duties the Consultant shall comply with all reasonable requests and directions of `The Company' or its customer or nominee including subsidiaries & affiliate entities. Complying with all local or internal policies and....
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....uant to this Agreement shall reside with `The Company'. 8. Confidential Information (a) The parties acknowledge that in connection with Consultant's Services, the Consultant may disclose to `The Company' time sensitive confidential information and trade reports of the Consultant which the Consultant may within the scope and in the course of performing the Services Such information may take the form of, for example: data concerning risk assessment, discoveries made by the Consultant; the Consultant's know-how; marketing strategies and processes. (b) Consultant hereby agrees that during the term of this Agreement: (i) Consultant shall not publicly divulge, disseminate, publish or otherwise disclose any 'The Company' Confidential information without `The Company's prior written consent (ii) Consultant shall not use any such 'The Company' Confidential information for any purposes other than consultation with 'The Company'. (c) Consultant agrees that their obligations under the Agreement are of a unique character that gives 'The Company' particular value, Consultant's breach of any of such obligations will result in professional misconduct towards 'The Company'. 9. Ter....
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....e best interest of 'The Company'. Exhibit A - Description of Consulting Activities Nature of Services: 1) As Specialists in freight market movement, the consultant will analyse commodity, shipping and freight markets, track movement of ships and cargoes and disseminate such information to 'The company'. 2) Track, collate, analyze and monitor Port Development & Logistics data originating from reliable source and update future trends 3) Monitor worldwide Economic Development, Bulk Commodity Trade pattern development 4) Indentify and provide information on Port Costs, Bunker (fuel) trend, Cost Estimation & Analysis. 5) Monitor Voyage Execution for smooth and efficient operations, 6) so as to optimize performance for 'The company'. 7) Examine lay time calculations and arrange for accounts reconciliation for objectives of eventual settlement. 8) Preliminary evaluation of cargo volume, trade patterns, trend in commodity movement, port congestion, Global as well as Regional economic development and analysis 9) Techno-Commercial assessment of vehicle type utilization opportunities, infrastructure development in various regions, Geographical impact on global tr....
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....rce and update future trends 3) Monitor worldwide Economic Development, Bulk Commodity Trade pattern development 4) Identify and provide information on Port Costs, Bunker (fuel) trend, Cost Estimation & Analysis. 5) Monitor Voyage Execution for smooth and efficient operations. 6) so as to optimize performance for 'The company'. 7) Examine lay time calculations and arrange for accounts reconciliation for objectives of eventual settlement. 8) Preliminary evaluation of cargo volume, trade patterns, trend in commodity movement, port congestion, Global as well as Regional economic development and analysis 9) Techno-Commercial assessment of vehicle type utilization opportunities infrastructure development in various regions, Geographical impact on global trade in bulk commodities arising from weather, piracy, war, conflict or any other causes which have prospects to impact trade. 10) Consultancy Fee is deemed earned upon actual voyage being performed and reconciliation of voyage specific amount and in accordance with clause 3 of the Consultancy Agreement. In the submission, the applicant has stated thus - • MCS (Marine Consultancy Service) provided....
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.... conjunction with each other in the ordinary course of business, one of which (i.e. consultancy service) is the principal supply. Having a look at the scope of work as set out in Exhibit A and the agreement clauses, we infer thus - 1. The Agreement dt.01.03.2017 is in respect of a particular contract (MV AM OCEAN PRIDE / MARUBENI CEMENT CHARTER PARTY CONTRACT DATED 3″ MARCH 2017) and is not a general agreement. 2. The services, both consulting and technical services, have been specifically set out in the Agreement. 3. There is a clear understanding that the foreign ship-owner shall request Consultant services on an as-needed basis. 4. There is no guarantee that any or all of the services described in this Agreement will be assigned during the term of this Agreement. 5. It is expressly provided that the foreign ship-owner, at its option, may elect to have any of the services, as set forth in Exhibit A, performed by other consultants or the foreign ship-owner's staff. 6. The applicant can be called on to do any or all of the services or may not be called to do any of the services. The flyer on 'composite supply and mixed supply' as available on the website of ....
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....ed not be bundled and could be got performed from different service providers or from his own staff, too. We see that the flyer on 'composite supply and mixed supply' has made a very clear observation that the illustrative indicators are not determinative but indicative of bundling of services in ordinary course of business. Hence, when the foreign ship-owner himself perceives the situation as being so, we need not even look at how the other players in the field, view the services to be. The requirement of 'principal supply' would, therefore, not be met in the facts of the instant case. It has been argued that the provision of consultancy service precedes the provision of support service. We feel that this certainly would not tantamount to making the consultancy services as being the principal supply. To the foreign ship-owner both the services are important and none could be identified as a principal supply. Just because one starts first and the other at a later stage would not lead to the prior supply being the principal supply. 7. In view of the specific facts as seen from the agreement, we find no difficulty in concluding that the provision of services under the impugned agr....
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....ties of marine transportation business, which is one of the support services in respect of marine transport and would therefore required to be classified under support services in transport or in case they are providing other professional, technical and business services or other support services nowhere classified, then they would have to classify their services in one of the below categories after taking into consideration the exact nature of service or services that they provide in a specific case. If we look at the Annexure, we find the following categories of services - 125 Heading 9967 Supporting services in transport 126 Group 99671 Cargo handling services 127 996711 Container handling services 128 996712 Customs house agent services 129 996713 Clearing and forwarding services 130 996719 Other cargo and baggage handling services 125 Heading 9967 Supporting services in transport 144 Group 99675 Supporting services for water transport (coastal, transoceani....
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....ase. Question 2(b) In the alternate, where services are provided to foreign ship owners distinctively as supply of consultancy service and support service with separate and demarcated fees for their consultancy service and for support service: (b) Whether support service qualifies as "intermediary service" in terms of Section 2(13) of the IGST Act? The definition of "intermediary" as found in section 2(13) of the Integrated Goods and Services Tax Act, 2017 is as under : (13) "intermediary" means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, hut does not include a person who supplies such goods or services or both or securities on his own account; As can be seen, an intermediary is to arrange or facilitate supply of services between two or more persons. We are not going by the applicant's contention but by the agreement copy placed before us. At the cost of third repetition, we reproduce the Exhibit A as under - Exhibit A - Description of Consulting Activities Nature of Services: 1. As Specialists in freight market movement, the ....
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....y evaluation of cargo volume, trade patterns, trend in commodity movement, port congestion, Global as well as Regional economic development and analysis 6. Techno-Commercial assessment of vehicle type utilization opportunities infrastructure development in various regions Geographical impact on global trade in bulk commodities arising from weather, piracy, war, conflict or any other causes which have prospects to impact trade. Support Services 7. Monitor Voyage Execution for smooth and efficient operations. 8. so as to optimize performance for 'The company'. Examine lay time calculations and arrange for accounts reconciliation for objectives of eventual settlement. On verification and examination of the nature of services as above being provided by the applicant it is very apparent that the claim made by them that they are providing services only to the ship owners and have no interaction with the ship charterers while providing these services would not be maintainable because the nature of Support services, being Monitoring of Voyage Execution for smooth and efficient operations and Examination of lay time calculations and arranging for accounts reconciliation fo....