TaxTMI 
TaxTMI 
Clarification relating to export of services-condition (v) of section 2(6) of the IGST Act 2017
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....rious representations have been received citing ambiguity caused in interpretation of the Explanation 1 under section 8 of the Integrated Goods and Services Tax Act 2017 in relation to condition (v) of export of services as mentioned in sub-section (6) of the section 2 of the Integrated Goods and Services Tax Act, 2017. Doubts have been raised whether the supply of service by a subsidiary/ sister concern/ group concern, etc. of a foreign company in India, which is incorporated under the laws in India, to the foreign company incorporated under laws of a country outside India, will hit by condition (v) of sub- section (6) of section 2 of Integrated Goods and Services Tax Act. 2. The matter has been examin....
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....tablishment 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 As per the above Explanation, an establishment of a person in India and another establishment of the said person outside India are considered as establishments of distinct persons. 3.3 Reference is also invited to the Explanation 2 of Section 8 of Integrated Goods and Service....
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....on Act, 1860; m.trust; and n. every artificial juridical person, not falling within any of the above; 3.5 The definitions of company and foreign company have been provided under section 2 of Companies Act 2013, as under: (20) "company" means a company incorporated under this Act or under any previous company law; (42) "foreign company" means any company or body corporate incorporated outside India which- (a) has a place of business in India whether by itself or through an agent, physically or through electronic mode; and (b) conducts any business activity in India in any other manner. Analysis of the issue: 4.1 Clause (v) of sub-section (6) of section 2....
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....ed in India, to any establishment of the said foreign company outside India, shall be treated as supply between establishments of distinct persons and shall not be considered as "export of services" in view of condition (v) of sub-section (6) of section 2 of Integrated Goods and Services Tax Act. Similarly, any supply of service by a company incorporated in India to its branch or agency or representational office, located in any other country and not incorporated under the laws of the said country, shall also be considered as supply between establishments of distinct persons and cannot be treated as export of services. 4.4 From the perusal of the definition of "person" under sub-section (84) of section&....