TaxTMI 
TaxTMI 
2021 (4) TMI 564
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....h the same to same foreign suppliers or to his order; that since party is sending bulk fertiliser for only job work in custom bonded godowns and paying them about 9.8 USD per MT for services, they are to return the same and charge them only USD 9.8 per MT. 2. The applicant has submitted that the foreign supplier cannot afford to pay GST on their service charges as their services are rendered on foreign goods in custom bonded warehouses; that the cargo will go directly from vessel to custom bonded warehouses and these goods never cross the customs barrier and mix-up with the indigenous goods; that these goods were temporarily imported to India for export purpose and stored in customs bonded warehouses and exported from there to outside India. The applicant has stated that they as the service providers do stevedoring, transportation, storage, bagging, stuffing and again transportation of the goods which are temporarily imported. The applicant has asked the following questions seeking Advance Ruling on the same: "1. Whether above described services(in brief facts) considered to be Export of Service or not? 2. If Yes, then we are eligible for Zero Rated Supply unde....
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....r Union territory and any other establishment being a business vertical registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons. 3.2 The applicant has submitted that in their view, to qualify any supply of service as export of service, it is required to meet all five clauses of Section 2(6) of IGST Act, 2017: (i) They are a registered dealer located and operating from India. (ii) The location of Service Recipient will be the location of usual place of residence which is UAE, as per Section 2(14)(d) of IGST Act, 2017. (iii) The place of Supply of Services will be considered to be out of India because the second proviso to Clause(a) sub-section(3) of Section 13 inserted w.e.f. 01st February, 2019 crave out an exception to Rule that Services actually performed be considered Place of Supply, hence in their case general rule specified under Section 13(2) of IGST Act, 2017 will apply which will be the location of the service recipient that will be his usual place of residence. (iv) They will receive their Service Charge in convertible Foreign Exchange. (v) The....
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....ovisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 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 similar provisions of the GGST Act. However, since the present application submitted by the applicant deals with export of services i.e. supply of services to persons located outside India, we will be required to make references to the IGST Act, 2017 as well as the Notifications of Integrated Tax(Rate) issued under the said Act. 7. On going through the submission of the applicant, we find that the applicant was operating in Kandla who till this time, were handling imported fertiliser in bulk of Indian fertiliser companies, importing fertiliser from abroad and on their behalf they used to discharge bulk fertiliser from the vessels, packing it into bags and then make despatches by Rail, Road and water. Recently Government has allowed foreign suppliers to send bulk fertiliser for value addition and store in Custom Bonded warehouse without payment of the custom duty and GST and after packing bu....
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....ble commodities and also undertakes job work for fertilizer commodities such as handling, packing and dispatches at Kandla Port, India. Further, as per the aforementioned agreements, the clients of the applicant will dispatch fertilizers cargo in bulk by vessel calling Kandla port and the applicant will make arrangements for stevedoring of the same and safely transport the goods to custom bonded warehouse and protect cargo, maintaining security. These clients require to deliver cargo in smaller lots to their buyers in bulk and bags for which they are required to seek services of the applicant for storage of their cargo in custom bonded warehouse in Kandla and dispatch through containers, barges and ships to their ultimate buyers in bulk and/or after bagging in custom bonded warehouse, and all the trade and shipping documents are to be raised on the clients. In view of the above, it appears that the aforementioned goods are being temporarily imported into India, stored in the custom bonded warehouses, and thereafter, are exported to their ultimate buyers as per the instructions of their clients. As per the agreements, the main activities to be undertaken by the applicant are as unde....
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....ment for such service has been received by the supplier of service in convertible foreign exchange; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8;" 11. We find that services provided by the applicant can be covered under 'export of service', if and only, if all the five conditions cited above are fulfilled/satisfied. Therefore, in order to confirm as to whether the services rendered by the applicant in the instant case, fulfil the aforementioned conditions or otherwise, the aforementioned conditions for 'export of service' needs to be compared to the issue in hand. On comparing the same, we find that the supplier, being the applicant in the instant case, is located in India. Also, on going through the sample copies of the bills of supply, issued by the applicant to their clients, in respect of the services rendered to them, we find that the value mentioned therein is in dollars i.e. it can be derived that the payment is in convertible foreign exchange. We, therefore, find that conditions (i) and (iv) are fulfilled/satisfied. However, as per condition (ii) a....
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....in accordance with Explanation 1 in section 8 to fulfil the condition of 'export of service'. Therefore, in order to find out what 'establishments of a distinct person' stands for, we will be required to refer to Explanation 1 of Section 8 of the IGST Act, 2017 which reads as under: "Explanation 1.--For the purposes of this Act, where a person has,-- (i) an establishment in India and any other establishment outside India; (ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or (iii) an establishment in a State or Union territory and any other establishment being a business vertical registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons. 14. On comparing the aforementioned conditions to the issue in hand, we find that since (ii)pertains to two different establishments within India i.e. one located within the state/union territory and the other located outside the state/union territory and (iii) pertains to one establishment located in a State or Union territory and another establishment i.e. a busi....
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....plier of services in order to provide the services: Provided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services: Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs and are exported after repairs without being put to any other use in India, than that which is required for such repairs; (4) The place of supply of services supplied directly in relation to an immovable property, including services supplied in this regard by experts and estate agents, supply of accommodation by a hotel, inn, guest house, club or campsite, by whatever name called, grant of rights to use immovable property, services for carrying out or co-ordination of construction work, including that of architects or interior decorators, shall be the place where the immovable property is located or intended to be located. (5) The place of supply of services supplied by way of admission to, or organization of a cultural, artistic....
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....such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette, specify. (9) The place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods. (10) The place of supply in respect of passenger transportation services shall be the place where the passenger embarks on the conveyance for a continuous journey. (11) The place of supply of services provided on board a conveyance during thecourse of a passenger transport operation, including services intended to be wholly or substantially consumed while on board, shall be the first scheduled point of departure of that conveyance for the journey. (12) The place of supply of online information and database 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 sati....
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.... 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: Provided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services: Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs and are exported after repairs without being put to any other use in India, than that which is required for such repairs; 16. We, however, find, that there is an exclusion clause in the second proviso to sub-section 3(a) which states that "nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs and are exported after repairs without bein....
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....The supplier of the service (the applicant) as well as the recipients of service (their clients) are not merely establishments of a distinct person in accordance with Explanation 1 of Section 8 of the IGST Act, 2017 as is apparent from the copies of the warehouse cum job-work agreement made by the applicant with their Overseas suppliers(Non-residents) and are not related to each other. In view of the above, we conclude that the services rendered by the applicant are not covered under 'Export of services' as envisaged in Section 2(16) of the IGST Act, 2017. 18. Further, we find that as per Integrated Goods and Services Tax (Amendment) Act, 2018 (32 of 2018), there is an amendment in the second proviso to sub-section (3) of Section 13 of the IGST Act, 2017(which has come into force w.e.f. 01.02.2019 as per Notification No.01/2019-Integrated Tax dated 29.01.2019). After amendment, the second proviso to sub-section(3) of Section 13 reads as under: "Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs or for any other treatment or process and are export....
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....ehouse (ii) removal of the said goods from the said warehouse by again transporting the goods (which have been temporarily imported into India) from the custom bonded warehouse as per requirement of the client and dispatch of cargo as per requirement within 2/3 months(for export) resulting in the export of the goods to the ultimate buyer from the custom bonded warehouse. Thus, it can be derived that the activities/services rendered by the applicant as mentioned above can be covered under the definition of 'process'. Further, as discussed earlier, the applicant undertakes job work for fertilizer commodities such as handling, packing and dispatches at Kandla Port. Further, it is very much apparent from the copies of the agreements submitted by the applicant containing the heading 'Warehouse cum job-work Agreement', that these agreements, undoubtedly involve jobwork. Definition of 'jobwork" appears in Section 2(68) of the CGST Act, 2017 which reads as under: "2(68) "job work" means any treatment or process undertaken by a person on goods belonging to another registered person and the expression "job worker" shall be construed accordingly." 21. From the above, it c....
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....visions of Section 2(14)(d) of IGST Act, 2017. (iii) The place of Supply of Services will be considered to be out of India in view of the amended second proviso to Clause(a) sub-section(3) of Section 13 inserted w.e.f. 01.02.2019, hence in this case, general rule specified under Section 13(2) of IGST Act, 2017 will apply which will be the location of the service recipient which is outside India. (iv) The payment of the services rendered by the applicant is received by the applicant in convertible foreign exchange as is apparent from the copies of bills of supply submitted by the applicant wherein the value of supply is mentioned in dollars. (v) The supplier of the service (the applicant) as well as the recipients of service (their clients) are not merely establishments of a distinct person in accordance with Explanation 1 of Section 8 of the IGST Act, 2017 as is apparent from the copies of the warehouse cum job-work agreement made by the applicant with their Overseas suppliers(Non-residents) and are not related to each other. 23. In view of the facts mentioned above, the answer to the first question asked by the applicant seeking Advance Ruling is that....