2019 (10) TMI 617

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....e ruling in respect of the following question: What is the correct Service Accounting Code (SAC) for the services mentioned below in terms of Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017? a. IT Support Services b. IT Managed Services 3. The applicant furnishes some facts relevant to the stated activity: a. The applicant states that he is a 100% subsidiary of Dimension Data Asia Pacific Pte Ltd (herein after called "DDAPPL") based in Singapore. The ultimate parent company is NTT, a company incorporated and listed in Japan. b. The Company has been set up in Milestone Buildcon IT SEZ in Bangalore falling under the jurisdiction of Cochin SEZ with their letter of Approval dated 07.07.2017. c. The applicant is engaged in providing IT Technical and Support Services and IT Managed Services to its group entities located outside India. The Company has commended its operations on 15.12.2017. d. The services provided by the company to the entities situated outside India qualifies as 'zero-rated supply' under section 16 of the IGST Act, 2017. e. The details of the services for which the advance ruling is so....

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....derstanding, the above mentioned services needs to be classified as per the Scheme of Classification of Services provided as Annexure to the Notification No. 11/2017- Central Tax (Rate) dated 28th June 2017 as amended from time to time. He also has further referred to the explanatory notes to the schemes of classification of services. Based on the above, the applicant has tabulated key categories under which the services may be classified as follows: Chapter/Section/Heading/Group Service Code (Tariff) Description of Services Rate of tax Heading 9983   Other Professional, technical and business services   Group 99831   Management consulting and management services including financial, strategic, human resources, marketing, operations and supply chain management 18%   998313 Information technology consulting and support services 18%   998314 Information technology (IT) design and development services 18%   998315 Hosting and information technology infrastructure (IT) infrastructure provisioning services 18%   998316 Information technology infrastructure and network mana....

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.... is a general entry referring to "other professional, technical and business services". Further, it should be notes under the said entry, specific tariff codes have been prescribed for information technology related services which are not covered elsewhere. The applicant states that it is a well-established principle in taxation jurisprudence for resolving classification disputes that a specific entry shall prevail over a general entry. In this regard, the applicant places reliance on the judgements of the Hon'ble Supreme Court of India in the case of Western India Plywoods Ltd. V. Collector of Customs, Cochin [2005 (188) ELT 365 (SC)] = 2005 (10) TMI 90 - SUPREME COURT and in the case of Superintendent of Central Excise and Others v. Vac Met Corporation Ltd. [1985 (22) ELT 330 (SC)] = 1985 (8) TMI 381 - SUPREME COURT. (b) In relation to Support Services: The applicant states that as per the description of services relating to support services stated earlier, it is evident that the services rendered by the applicant viz. Support Services relates to the provision of information technology software services. The Notification under paragraph 4 defines Information....

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....issues involved, on which advance ruling is sought by the applicant, and relevant facts. 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 a reference to the same provisions under the KGST Act. 6.1 The description of services which are provided by the applicant have been examined with reference to the details provided by the applicant. The classification tariff entries 998313 and 998316 have also been verified and the following points are noted: (a) The Service Accounting Code 9983 is considered first. Section 8 deals with the Business and Production Services and there is no dispute that the services provided by the applicant fall under this category. The services provided are not covered under Heading 9981 (relating to Research and Development Services) or 9982 (relating to Legal and Accounting Services). Hence it gets covered under the Heading 9983 which is related to Other Professional, technical and business services and there is no dispute in this matter.....

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....to the present issue. 6.3 Service Code 998313 includes i. Providing advice of export opinion on technical matters related to the use of information technology, such as advice on matters such as hardware and software requirements and procurement, systems integration, systems security, provision of expert testimony on IT related issues; (not applicable) ii. providing technical expertise to solve problems for the client in using software, hardware or an entire computer system, such as provision of customer support in using or troubleshooting the software, upgrade services and the provision of patches and updates, provision of customer support in using or troubleshooting the computer hardware, including testing and cleaning on a routine basis and repair of IT equipment, technical assistance in moving a client's computer system to a new location, provision of customer's support in using or troubleshooting the computer hardware and software in combination; iii. providing technical expertise to solve specialized problems for the client in using a computer system, such as auditing or assessing computer operations without providing advice or other follow-up act....