TaxTMI 
TaxTMI 
2022 (4) TMI 1291
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....herein). 3. In view of the above, the applicant has sought advance ruling in respect of the following questions: a) Whether Consultancy Services rendered to ADB, Manilla would qualify as "export of services" in terms of Section 2 (6) of the Integrated Goods and Services Tax Act, 2017 ("IGST Act")? b) If the Consultancy Services rendered to ADB, Manilla do not qualify as "export of services", whether ADB would be required to obtain refund of GST charged on Invoice issued for Consultancy Services in terms of Section 55 of the Central Goods and Services Tax Act, 2017 ("CGST Act") or the services would be exempt as per provisions of the Asian Development Bank Act, 1966 ("ADB Act")? 4. BRIEF FACTS OF THE CASE: The applicant furnishes the following facts relevant to the issue: 4.1 The Consultancy Services, broadly, envisage multifarious study to conceptualise a transit-oriented development plan in respect of construction of new metro lines, phases 2A and 2B, with a total length of 56 km including 30 stations and three depots, at Bengaluru, Karnataka. In this regard, the construction of new metro lines would be undertaken by Government of Karnataka, for which Go....
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....emerges that if place of supply of services rendered by IBI to ADB emerges to be outside India, such supply of services would qualify to be "export of services". In this regard, Section 16 of the IGST Act lays down the criteria for determining the "place of supply" of services in cases where location of recipient (i.e. ADB in the instant case) is outside India. Section 13 (2) of the IGST Act lays down the default rule that "place of supply" services would be location of recipient of service except in cases enlisted under Section 13(3) to 13 (13) of the IGST Act. In this regard, Section 13 (4) of the IGST Act provides as follows: "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" 5.1.4 Given that the Consultancy Services are....
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....es that specified multilateral Financial Institution and Organization (which includes ADB) would be entitled to claim a refund of taxes paid on the notified supplies of services received by them. Section 55 if reproduced below for ease of reference: "55. Refund in certain cases. The Government may, on the recommendations of the Council, by notification, specify any specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), Consulate or Embassy of foreign countries and any other person or class of persons as may be specyied in this behalf, who shall, subject to such conditions and restrictions as may be prescribed, be entitled to claim a refund of taxes paid on the notified supplies of goods or services or both received by them." 5.2.2 The Government of India has issued a Circular for clarifying its stand in respect of applicability of GST on ADB. In Circular No. 83/02/2019- GST dated 1st January 2019 ("GST Circular"), it is stated as follows: "2. The ADB Act, 1966 provides that notwithstanding anything to the contr....
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....(c) Conferring on the Bank any exemption from duties or taxed which are in fact no more than charges for services rendered." 5.2.4 Article 56 of the Agreement, which is contained under Schedule to the ADB Act, provides as follows (relevant extracts only): "ARTICLE 56 EXEMPTION FROM TAXAITON 1. The Bank, its assets, property, income and its operations and transactions, shall be exempt from all taxation and from all customs duties. The Bank shall also be exempt from any obligation for the payment. Withholding or collection of any tax or duty. 2. No tax shall be levied on or in respect of salaries and emoluments paid by the Bank to Directors, alternates, officers or employees of the Bank, including experts performing missions for the Bank, except where a member deposits with its instrument of ratification or acceptance a declaration that such member retains for itself and its political sub-divisions the right to tax salaries and emoluments paid by the Bank to citizens or nationals of such member. ..." 5.2.5 As per the aforesaid provisions of the ADB Act, the services rendered by IBI should be exempt, whereas in terms of the Section 55....
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....erms of Section 95(a) read with Section 97(2) of the CGST Act. 8.4 The applicant has sought clarification as to whether their services would qualify as "export of services" in terms of Section 2(6) of the IGST Act 2017. It is required to determine whether conditions for qualifying as "export of services" as laid down under Section 2(6) of the IGST Act are fulfilled in respect of the said services or not, one of which is the "place of supply" of the said services, whether it is in India or outside India. Thus to determine whether the said services would qualify as "export of services" or not it is essential to decide the "place of supply" of the said services. 8.5 If the authority determines the "place of supply" of said services as outside India, then the applicant would not be required to pay GST on the said services, as being "zero rated supply". In effect, the authority would determine the liability of the applicant to pay tax on services, which is squarely within the power of "determination of the liability to pay tax on any goods or services or both, in terms of Section 97(2)(e) of the CGST Act. 8.6 The above averment finds support in judgement of Hon'ble Kerala H....
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....side India. It is because the services of IBI are not directly in relation to immovable property. The services in question involve advisory/consultancy in relation to holistic planning of the growth-oriented transport system in the city of Bengaluru. In this regard, CBEC Educational Guide issued in the month of June 2012 in para 5.5.2 highlighted the meaning of the words "directly in relation to the immovable property" in respect of similar provision under erstwhile Service tax laws (i.e. Chapter V of the Finance Act, 1994 as it existed at that point in time) and provide as follows: "There must be more than a mere indirect or incidental connection between a service provided in relation to an immovable property, and the underlying immovable property. For example, a legal firm's general opinion with respect to the capital gains tax liability arising from the sale of a commercial property in India is basically advice on taxation legislation in general even though it relates to the subject of an immovable property. This will not be treated as a service in respect of the immovable property. ...... The place of provision of services rule applies only to ser....
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....ention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 10. We have considered the submissions made by the applicant in their application for advance ruling. We also considered the issues involved on which advance ruling is sought by the applicant and relevant facts along with the arguments made by the applicant and the submissions made by their learned representative during the time of hearing. 11. The Applicant, has entered into a Contract with Asian Development Bank, Manilla for rendering Consultancy Services which broadly envisage multifarious study to conceptualise a transit-oriented development plan in respect of construction of new metro lines, phases 2A and 2B, with a total length of 56 km including 30 stations and three depots, at Bengaluru, Karnataka. In view of this, the applicant sought advance ruling in respect of questions mentioned at para 3 supra. 12. The first question is "Whether Consultancy Services rendered to ADB, Manilla would qualify as "export of services" in terms of Section 2(6) of the IGST Act 2017". In this regard we invite reference....
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....State to act as the Authority for the State. (2) The Authority shall consist of- (i) one member from amongst the officers of central tax; and (ii) one member from amongst the officers of State tax, to be appointed by the Central Government and the State Government respectively. (3) The qualifications, the method of appointment of the members and the terms and conditions of their services shall be such as may be prescribed." Further Section 96 of the CGST Act, 2017 states that the Authority for advance ruling constituted under the State Act, shall be deemed to be the Authority in respect of the CGST Act, 2017 also. The provision is reproduced as under- "96. Authority for advance ruling - Subject to the provisions of this Chapter, for the purposes of this Act, the Authority for advance ruling constituted under the provisions of a State Goods and Services Tax Act or Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory." From the above it is seen that the Authority for advance ruling is constituted under the provisions of the State GST Act and shal....
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....f place of supply, is beyond the scope of advance ruling. This authority, therefore, cannot answer the first question in the application. 13.4 The applicant contended that the Hon'ble High Court of Kerala, in the case of Sutherland Mortgage Services Inc. Vs Principal Commissioner and others held that "it is true that the issue relating to the determination of place of supply is not expressly enumerated in any of the clauses as per clauses (a) to (g) of Section 97(2) of the CGST Act, but there cannot be any two arguments that the said issue relating to determination of place of supply, which is one of the crucial issues to be determined as to whether or not it fulfills the definition of place of service, would also come within the ambit of the larger issue of "determination of liability to pay tax on any goods or services or both" as envisaged in clause (e) of Section 97(2) of the Act". It could be seen from above that the Hon'ble High Court of Kerala held that determination of place of supply is one of the crucial issues and would come within the ambit of the larger issue of determination of liability to pay tax on goods or services or both. It is pertinent to mention....