TaxTMI 
TaxTMI 
2021 (8) TMI 781
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....&2, GIDC Industrial estate, Sisodra, Navsari (Unit-3). 2. The applicant has submitted that they have been granted approval from Development Commissioner(KASEZ) to operate as an 100% Export Oriented Unit ('EOU') vide permission dated 17-8-92; that they have been granted permission as per LUT as an 100% EOU to manufacture products such as Easicut diamond impregnated segments, Easicut diamond segmented saw, Continuous type saw, Turbo Type saw, Diamond core bit drills, Aluminium Flange for diamond wheels, Copper washers and blister moulds; that they have been granted license for private bonded warehouse under 100% EOU Scheme bearing License No.2/93 with the additional premises Unit-1 and Unit-3 being included in the said license vide amendment to the license dated 2-12-2010 and the license has been renewed from time to time. 3. The applicant has further submitted that they have a separate R&D unit wherein research and development activities are carried out for their own purposes as well as for other customers; that the applicant is carrying out R&D activities on behalf of entities situated outside India i.e. the applicant is carrying out such R&D activities on the product samples....
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....eed between the parties from time to time. 5.2 The applicant has submitted that they raise periodic invoices of such services provided by them on the foreign customer and the consideration is received by the applicant in foreign currency; that the invoices raised by them presently are inclusive of IGST at the rate of 18% on the taxable value of the R&D services provided to the foreign company and are thus making payment of IGST on the R&D services provided to foreign companies. They have submitted illustrative copy of the invoice and bank realization certificate marked as Annexure-3. The applicant is of the view that the services provided by them falls under 'export of service' and is thereby exempted from tax liability under IGST Act, 2017. The applicant wants to know: (i) whether the services provided by the applicant to the entities located outside India is covered under Section 13(2) of the Integrated Goods and Services Tax Act, 2017? Or (ii) Whether the services provided by the applicant is liable to CGST and SGST or IGST or is eligible to be treated as a 'zero rate supply' under Section 16 of the IGST Act, 2017. 6. The applicant has submitted that the ....
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....y as under: "16. (1) "zero rated supply" means any of the following supplies of goods or services or both, namely:-- (a) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. (2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. (3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:-- (a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or (b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisi....
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....icant has submitted that the services provided by them fulfils all the conditions under Section 2(6) of the IGST Act, 2017 as under, and the said services thereby qualify as an 'export of service': Sr.No. Particulars of Section 2(6) Relevant section to be referred. Application in the facts of present case. (i) The supplier of service is located in India. Section 2(93) of CGST Act and 2(15) of the IGST Act. Applicant is located in India. (ii) The recipient of service is located outside India. Section 2(105) of CGST Act and Section 2(14) of the IGST Act. The Recipient of service are foreign companies located outside India. (iii) The place of supply of service is outside India. Section 13(2) of the IGST Act. The place of supply is location of recipient, which is foreign company in the present case. (iv) The payment for such service has been received by the supplier of service in convertible foreign exchange. The applicant has received the payment in convertible foreign exchange. (v) The supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanati....
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....ipient, which require the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services. (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, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place where the event is actually held. (6) Where any services referred to in sub-section (3) or sub-section (4) or sub-section (5) is supplied at more than one location, including a location in the taxable territ....
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....er 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 the course 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 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....
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....service being rendered outside India would render it to be an export. The goods supplied to the assessee, minor though in proportion may be, are subject to alteration in the course of research. It is not asserted anywhere that these goods, in its altered or unaltered form, are sent back to the service recipient; if it were, the provisions of the Customs Act, 1962 would be invoked to eliminate tax burden. If the goods cease to exist in the form in which it has been supplied, it cannot be said that services have been rendered on the goods even if it cannot be denied that the services have been rendered on the goods. Consequently, the provisions of Rule 4(1) are not attracted and, in terms of Rule 6A of the Service Tax Rules, 1994, the definition of export of services is applicable thus entitling the assessee to eligibility under Rule 5 of the Cenvat Credit Rules, 2004. 7.3 The applicant has submitted that the aforesaid judgement was relied on in the case of Indeus Life Science Pvt.ltd. vs. CCE, Pune-II, 2019 (370) ELT 678 (Tri-Mumbai) as it was based on identical facts and that it is a settled principle of law that when the service is consumed outside India, tax is not leviable in....
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....ies of the judgements relied upon by them, on 29-6-21. The applicant has relied upon the decision of PCCCE vs. Advinus Therapeutics ltd. 2016 (12) TMI 34-CESTAT Mumbai as well as the decision of Advance Ruling Authorities of Gujarat in the case of Manoj Bhagwan Mansukhani (M/s. Rishi Shipping) 2021 (4) TMI-564 in support of their contention. B. Question on which Advance Ruling sought? (i) Whether the services provided by the applicant to the entities located outside India is covered under Section 13(2) of the Integrated Goods and Services Tax Act, 2017? (ii) Whether the services provided by the applicant is liable to Central Goods and Service Tax and State Goods and Service Tax or Integrated Goods and Services Tax or is it eligible to be treated as a 'zero rated supply' under Section 16 of the Integrated Goods and Services Tax Act, 2017. C. Personal Hearing: 8. Shri Jigar Shah, CA appeared for personal hearing through virtual mode (Video Conferencing) on 30-6-21. On being specifically asked as to whether the applicant was supplying subject services i.e. carrying out R&D activities by only working on the goods provided by the Hilti Aktiengesellschaft and w....