2019 (10) TMI 564

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....on: (a) Whether the supplies made by the Applicant to Volvo Sweden is a supply of services? (b) Whether the supplies by the Applicant amounts to export of services to Volvo Sweden and hence zero rated under GST law?. 3. The applicant furnishes some facts relevant to the stated activity: a. The applicant states that he is a joint venture between the Vovo Group and Eicher Motors Limited and this joint venture has come into effect in July 2008. They are in the business of selling Volvo branded trucks and thereafter providing after sale support services, including warranty services for Volvo branded trucks and buses in India. b. He states that Volvo Sweden has appointed the applicant for the distribution of its products in India, including buses and trucks. The applicant sells its products with a standard warranty of 1 to 2 years, the cost of which is included in the cost of sale of such trucks or buses. The applicant is responsible for the servicing of warranty claims of its customers and the onus to reimburse such expenses incurred for discharging the warranty obligation lies with Volvo Sweden. In pursuance to this agreement, the applicant, on i....

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....or a consideration by a person in the course or furtherance of business; (ii) import of services for a consideration whether or not in the course or furtherance of business; (iii) the activities specified in Schedule I, made or agreed to be made without a consideration; and (iv) the activities to be treated as supply of goods or supply of services as referred to in Schedule II..' b. that with respect to the transaction between the applicant and Volvo-Sweden, it is a supply of both goods and services by the applicant, for a consideration received from Volvo, Sweden and therefore qualifies as a supply under the GST Law. c. that as per Section 2(30) of the CGST Act "Composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. Further, it is submitted that Section 2(90) of the CGST Act defines the term "Principal supply" to mean the supply of goods or services which constitutes the predomi....

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....f the IGST Act covers specific category of services for determination of the place of supply. As per Section 13(3)(a), the place of supply of 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, shall be the location where the services are actually performed. To apply the above provision, two components are provided viz., (1) the goods must be made available and (2) by the recipient of services, to the supplier of services. 7. The applicant states that the facts of the present case, the goods i.e., Truck, Bus, Construction equipment and penta engines are to be physically made available to the Applicant who is the supplier of services; however, such goods are made available by the customers (owners of such vehicles) and not by the recipient of services (i.e., Volvo Sweden). As the goods are not made physically available by the recipient to the supplier, the provisions of this Section for determination of place of supply based on making the goods physically available would not apply. 8. No other sub-rule is ....

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.... applicant submits that the Authority may consider the services provided by the applicant to Volvo Sweden as export of services and in terms of Section 16(1) of the IGST Act, export of services would be considered as Zero-rated supply. PERSONAL HEARING / PROCEEDINGS HELD ON 23.04.2018. 12. Sri Shivadass, Advocate and duly authorised representative of the applicant appeared for personal hearing proceedings held on 23.04.2018, reiterated the facts narrated in their application and also furnished a copy of written submissions. 13. FINDINGS & DISCUSSION: 13.1 We have considered the submissions made by the Applicant in their application for advance ruling as well as the submissions made by Sri Shivadass, Advocate and duly authorised representative of the applicant during the personal hearing. We have also considered the issues involved, on which advance ruling is sought by the applicant, and relevant facts. 13.2 At the outset, we would like to state that the provisions of both the CGST Act and the KGST 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 mean ....

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.... services provided for the purposes of replacing the parts, the applicant is raising an invoice on Volvo Sweden and the Volvo Sweden, after processing the claims of the applicant, issue credit note to the applicant or its dealers (who are under contract only with the applicant and not with Volvo Sweden) and the payments are settled by the applicant after deducting the amount from the payments to be made for the import of goods. It is also not clear as to how the dealers who have purchased the goods from the applicant would settle the consideration payable to the applicant using the credit notes which are issued by M/s. Volvo Sweden to them. (e) Hence the transaction is merely providing of warranty service by the applicant to the customers. What is sold by the applicant is a product and this product is a bundled with the service. What service executed by the applicant out of its resources is only serving the obligation to the customer and the customer is only interacting with the applicant and not with Volvo Sweden. The parts are replaced only when required and only those parts which are covered under the warranty claims and the service charges for fitting out such parts ar....