TaxTMI 
TaxTMI 
2021 (4) TMI 937
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.... by the Appellate authority on its own accord, or is brought to its notice by the concerned officer, the jurisdictional officer or the applicant within a period of six months from the date of the Order. Provided that no rectification which has the effect of enhancing the tax liability or reducing the amount of admissible input tax credit shall be made, unless the appellant has been given an opportunity of being heard. 2. Under Section 103 (1) of the Act, this Advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only (a). On the applicant who had sought it in respect of any matter referred to in sub-section (2) of Section 97 for advance ruling; (b). On the concerned officer or the jurisdict....
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....Advance ruling on the application for advance ruling filed by the appellant. 2.1 As per the Statement of Facts in Annexure A filed along with the Appeal, the Appellant is engaged in the business of Software development for the Infusion system manufactured by its ultimate holding Company ICU Medical Inc., (hereinafter referred to as 'ICU Inc.'), having its place of business located at USA. ICU Inc., in turn has entered into a Cardholder User agreement with the employees of the Appellant for issuance of Credit Cards. The Credit Cards issued to the employees are meant to be used only for business related expenses within and outside India. (Travel, accommodation in the hotel, food expenses, etc.) The employees of the appellant use the credit c....
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....eement. The consideration for the development service is agreed to be made on a cost plus margin basis. The expenses incurred by the Appellant through this credit card also forms part of software development cost and subsequently included in invoice raised by the appellant on ICU Inc for development of software. 2.4 With the above information and detailed submissions and with documentary evidences, the Appellant had filed an application before Honorable Authority for Advance Ruling, Tamil Nadu (hereinafter referred to as "Authority") on October 16, 2019 seeking clarification on: 1. Whether GST is leviable on the reimbursement of the subsidiary company to its ultimate holding company located in a foreign territory outside India. 2. In c....
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....ng the credit card; * The impugned order has erred in not considering the fact that independent service providers provide travel and conveyance services on which the service provider has raised invoice on the Appellant independently. ICU Inc., merely collects the amount relating to such expenses relating to Appellant for settling the credit card dues; * The appellant is the recipient of goods or services and availing the eligible input tax credit based on the tax invoices issued by the suppliers; * the payments made by the appellant to the ultimate holding company towards reimbursement of payments made towards credit card expenses are transaction in money and not a supply and consequently, the same is not liable to GST under Reverse C....
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....hrough the credit card are initially settled by the holding company abroad with the card issuing bank. For the purpose of accounting and operational convenience, the expenses incurred through such credit card issued by the overseas holding company to the employees of the appellant company, are first recovered from the appellant through invoice raised from USA company and subsequently included in the invoice raised by the appellant on the holding company for the development of software. In other words, the reimbursements paid by the appellant to the holding company for the expenses incurred initially by its employees are nothing but part of software development cost and consequently part of the taxable value of services of appellant. 5.2 It....
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....ough the credit card of the overseas holding company (recipient of the supply of appellant), borne at the first instance by the recipient of the supply is nothing but which the supplier (appellant) was liable to incur and reimbursed are for the only purpose of restoring the appellant company's accounts to previous position for operational convenience so that the same could be later included in the software development charges invoiced by the appellant to the recipient (overseas holding company). There is indeed an economic rationale for such treatment of expenses as transfer of resources happened between the appellant supplier to its overseas holding company recipient. Such reimbursements as per Section 15 of the GST Act read with sequentia....