TaxTMI 
TaxTMI 
2020 (12) TMI 786
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.... 4) If Not exempted, what is the rate of GST on supply? 5) In what circumstances will IGST, under reverse charge, be applicable or whether it is applicable in the situation of procurement from foreign supplier and supply from out of India as discussed above? 6) If the customer is from India and paying the consideration in dollar, whether it will be allowed as exports or if not allowed as exports then whether GST is leviable? What is rate of SGST & CGST or IGST? Under which HSN Code or SAC? 7) If customer pays for the e goods in Indian rupees and goods delivered through CLOUD located outside India whether SGST & CGST or IGST leviable on such transactions? 8) In case where customer / buyer is from out of India and payment is done in dollar, according to us it is export of goods / services and therefore neither SGST & CGST is leviable? Please clarify the same. 9) In case buyer is from India, the goods/ services are stored in CLOUD which are the servers outside India, therefore even though payment is received in rupees, it is again export of services being services are received from distantly installed servers. Hence No CGST and or SGS....
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.... service. The Payments are received from customers using PayPal. 2.5 The purchase of these digital goods are made online by the applicant's customers. Once, payment is received, the merchant provides the customer with a digital item as an e-mail attachment or may provide a secure link where the item can be downloaded. 2.6 No invoice is raised for delivering digital said goods, which have limited life of say, a few days or weeks. Payments are done by applicant's customers on line. It is not a software sale and does not require license. There is no work involved at the site of the client. 2.7 Applicant has stated that: a) Digital goods/e-goods are not necessarily goods as commonly understood & as defined in the GST Acts but they can at best be called as "services." (b) They are supply of services done through internet or mails. There is no delivery of e-goods as such. (c) The said e-goods, are stored on CLOUD which are located outside India, & are purchased from vendors outside India who send it to the CLOUD as identified by the buyer / vendor/ the applicant. (d) The e-goods are not received by the seller in India but are stored on CLOUD h....
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....ernet or an electronic network and the nature of which renders their supply essentially automated involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services such as,- .................(vii) online gaming." This definition will answer the first question posed by the applicant i.e. e-goods (in this case online gaming) will be considered as services under the GST Laws. 5.4 The next three questions are regarding classification of the above said services, and the rate of GST on such, if the same are not exempted. 5.4.1 The Code wise List of services finds mention in Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. In the subject case we find that the applicant is supplying online content services'. The relevant Sr. Nos 379 to 384 are reproduced as under:- Sl.No. Chapter, Section, Heading or Group Service Code (Tariff) Service Description 379 Group 99843 On-line Content Services 380 998431 On-line text based information such as online books, newspapers, periodicals, directories and the like 381 998432 On-line Audio Content....
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....e second part of the query i.e. whether GST under reverse charge is applicable in the situation of procurement from foreign supplier & supply from out of India as in the subject case. 5.5.3 A perusal of the submissions made by the applicant reveals that Digital Goods are purchased by applicant from the suppliers based abroad. Such digital goods, in this case online gaming, are then sent to the applicant by Email or Instant message service. Thus we find that there is a supply of OIDAR services to the applicant from suppliers based abroad. The nature of OIDAR services are such that it can be provided online from a remote location outside the taxable territory. A similar service provided by an Indian Service Provider, from within the taxable territory, to recipients in India would be taxable. In cases where the supplier of such service is located outside India and the recipient is a business entity (registered person) located in India, the reverse charge mechanism would get triggered and the recipient in India who is a registered entity under GST will be liable to pay GST under reverse charge and undertake necessary compliances. If the supplier is located outside India and the reci....
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....Authority of Advance Ruling (AAAR), Maharashtra State in the case of M/s. NES Global Specialist Engineering Services Pvt. Ltd. vide its Order No. MAH/ AAAR/55-R/03/2019-20 dated 02.08.2019 = 2019 (11) TMI 478 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA, M/s Micro Instrument (Mrs.Vishakha Prashant Bhave), vide appeal order no. MAH/AAAR/SS-RJ/26/2018-19 dated 22.03.2019 = 2019 (11) TMI 475 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA, M/s Sabre Travel Network India Pvt. Ltd., vide appeal Order No. MAH/AAAR/SS-RJ/30/2018-19 dated 10.04.2019 = 2019 (7) TMI 1475 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA, M/s Asahi Kasei Pvt. Ltd., vide appeal Order No. MAH/AAAR/SS-RJ/01/2019-20 dated 19.06.2019 = 2019 (7) TMI 1476 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA, and in the case of M/s Segoma Imaging Technologies India Pvt Ltd, vide appeal order no. MAH/AAAR/SS-RJ/28/2018-19 dated 03.04.2019 = 2019 (11) TMI 476 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA. 5.8.2 However, in the case of Sutherland Mortgage Services INC Vs Principal Commissioner = 2020 (3) TMI 186 - KERALA HIGH COURT, the Hon'ble Kerala High Court has observed that even though th....
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....side India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange 1[or in Indian rupees wherever permitted by the Reserve Bank of India); and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation I in section 8;" 5.8.7 The subject transaction satisfies the conditions mentioned in clauses (i), (ii), (iv) and v) of Section 2(6) of the Integrated Goods and Services Tax Act, 2017 (IGST Act). However to be considered as Export of Services as per the GST Laws clause number (iii) with respect to Place of Supply of Services should be outside India. Whether the subject transaction is taxable or otherwise can be decided only by discussing the place of supply. Hence we take up the issue of place of supply in the subject case. 5.8.8 We therefore refer to the provisions of Section 13 of the IGST Act, 2017 which will be applicable to determine the place of supply since, in this case, the applicant supplying the services is in India and the client/sponsor to whom the services are supplied is situated outside India. Sec 13(2) of IGST ....
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....base access or retrieval services shall be the location of the recipient of services. Explanation.-For the purposes of this sub-section, person receiving such services shall be deemed to be located in the taxable territory, if any two of the following non-contradictory conditions are satisfied, namely:- (a) the location of address presented by the recipient of services through internet is in the taxable territory; (b) the credit card or debit card or store value card or charge card or smart card or any other card by which the recipient of services settles payment has been issued in the taxable territory; (c) the billing address of the recipient of services is in the taxable territory; (d) the internet protocol address of the device used by the recipient of services is in the taxable territory; (e) the bank of the recipient of services in which the account used for payment is maintained is in the taxable territory, (f) the country code of the subscriber identity module card used by the recipient of services is of taxable territory; (g) the location of the fixed land line through which the service is received by the recipient is in the taxable territory. Ap....
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....nd recipient of services are located in taxable territory, the subject services will not be considered as exported and the applicant will have to discharge his GST liability on the amounts received for supplying such services. 5.10 The last two questions raised by the applicant are "whether IGST is applicable under section 5(3) & 5(4) of the IGST Act and if yes, then its rate May please be clarified" 5.10.1 We have already held in para 5.5.3 above that, the applicant is required to obtain registration and pay GST under reverse charge mechanism. We reiterate that IGST is applicable under section 5(3) & 5(4) of the IGST Act at the rate mentioned in para 5.4.1 above i.e @18%. 06. In view of the extensive deliberations as held hereinabove, we pass an order as follows: ORDER (Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA- 06/2019-20/B-58 Mumbai, dt. 15.12.2020 For reasons as discussed in the body of the order, the questions are answered thus - Question. 1) Whether "e-goods" as commercially known in the market are "goods" as defined in the GST Acts or are they services as per GS....