TaxTMI 
TaxTMI 
2022 (4) TMI 1343
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....an export of services as defined under Section 2(6) of the Integrated Goods and Services Tax Act 2017? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT 2.1 Gulf Turbo Solutions LLP (hereinafter referred as GTS LLP), the applicant, a LLP incorporated in India, is in the business of service and repairs of various types of Turbochargers and supplying spare parts required for Turbochargers and ship spares. 2.2 Gulf Turbo Repairs and Services FZC (hereinafter referred as GTRS) is the company incorporated/registered in Sharjah, UAE & is also in the business of service & repairs of various types of Turbochargers. 2.3 Special relationship exists between both the companies whereby majority of shares in both the compani....
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....ble classifications for the marketing services supplied by Applicant. The relevant HSN codes are as under: HSN Code 9961/9962 - Intermediary Service-Services in wholesale trade and Services in retail trade. HSN Code 9985 - Support Service 2.8 The impugned Marketing Service Agreement clearly defines the relationship between the parties is that of independent contractors meaning thereby that agreement does not intend to create relationship of principal and agent. Applicant is not authorized and in no way carries out activities such as negotiation, conclusion of contracts, acceptance of orders, determination of pricing, invoicing, rebate/discounts, resolution of customer complaints or settlement of disputes with customers. On the contrary it is clearly mentioned in the agreement that applicant will provide services on his own account. All the costs and expenses incurred for giving these services will be borne by the Applicant. Hence, the proposed marketing services as per agreement will not fall under 'Intermediary Services' as envisaged under Section 2(13) of IGST Act, 2017. 2.9 Applicant submits that supply of services as per marketing service agre....
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....earch on GTRS Turbo charger services, its functioning and feedback as to complaints if any. These services will be classified under SAC Code 998399- Other professional, technical and business services not elsewhere classified. g. Connecting customers with representatives of GTRS for the purpose of business and other commercial discussions between Customer and GTRS. These services will be classified under SAC Code 99859 -Business support services h. GTSLLP agrees to provide from time to time as and when requested by GTRS with economic, industrial and technical information on the Turbochargers and other ship spares and related services, markets, trends and outlook together with similar information concerning such other industries in India and world globally. These services will be classified under SAC Code 998394-Original compilation of facts or information or may be classified under SAC Code 9985 -Business support services i. Monitoring regulatory developments- These services will be classified under SAC ode 998216-Other legal service not elsewhere classified. 2.13 Applicant's role in respect of adoption and implementation of GTRS's advertising ....
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....ked out on cost plus margin basis without any correlation to the sale of service or business transactions. Bouquet of services proposed to be provided will constitute as a package for single consideration. Thus, the proposed service under Marketing Services Agreement cannot be classified as 'Intermediary Service' WHETHER SERVICES SUPPLIED BY APPLICANT CONSTITUTE COMPOSITE SUPPLY AND CATEGORIES AS 'SUPPORT SERVICES' 2.18 Supply of services as evidenced by Marketing Services Agreement constitute as composite supply with Marketing Services as a principal supply. In the Marketing Services Agreement, applicant is proposing more than two taxable supplies to the Recipient GTRS. In respect of supplies of two or more taxable supplies and to fall within the ambit of composite supply, it will be necessary to determine whether particular supply is naturally bundled in the ordinary course of business and what constitutes Principal Supply. Further, Applicant's role in respect of adoption and implementation of GTRS's advertising policy, sales promotion, liaising with customers etc. is in the nature of assistance in conducting the said activities and not actual provis....
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....on. 4.2 The Application was admitted and Final e-hearing was held on 14.12.2021. The Authorized representative of the applicant, Shri. Rajendra Jahagirdar, CS was present. The Jurisdictional officer was absent. Case was heard. 05. OBSERVATIONS AND FINDINGS: 5.1 We have perused the documents on record and submissions made by both, the applicant as well as the jurisdictional officer in the said matter. 5.2 The Applicant, M/s Gulf Turbo Solutions LLP has submitted that they are agreeing to provide Marketing Services to M/s Gulf Turbo Repairs and Services FZC (GTRS) as per the Marketing Services Agreement agreed to be entered into between both the parties once advance ruling is received from the Advance Ruling Authority. Thus, it is clear that presently there is no agreement between the applicant and GTRS. 5.3 The applicant has listed the supply of services to be rendered by them to GTRS and the services include as under:- (a) Liaising with Customers and potential Customers and to collect their Turbocharger & Engine Room Machinery Service & Spare parts specifications & requirements, strategy, and reporting the information obtained through such customer interacti....
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....aining orders and establishing and maintaining close commercial relationships between GTRS and Customers'. Thus, the applicant appears to be acting as a conduit between GTRS and the customers and such action as a conduit can also be seen from the fact that, the applicant will be providing any feedback to GTRS that would help to improve the GTRS marketing. Why would the applicant require improving GTRS marketing if they are having a P2P business, this fact has not been not explained by the applicant. Further the fact that the applicant will be facilitating GTRS in arrangement of discussions and provision of interpretation services and cross culture advise also shows that the activity of the applicant is to promote, assist, facilitate, the business of GTRS. 5.4.3 From the draft agreement submitted by the applicant, we find that there is a clause that there is a separate Transfer Pricing Agreement between the applicant and GTRS for supply of services as well as supply of goods. In general practice, Transfer Pricing is an accounting practice that represents the price that one division in a company charges another division for goods and services provided and further, Transfer pri....
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.... definitely stated that they connect GTRS with the customers and prospective customers in India. By connecting the customers/prospective customers with GTRS, the applicant is actually arranging or facilitating the supply of goods or services or both, between two or more persons. Further, the applicant will be liaising with the customers of GTRS and collect their Turbocharger & Engine Room Machinery Service & Spare parts specifications & requirements, strategy, & reporting the information obtained through such customer interactions to GTRS. Also the fact that, the applicant will be providing information on products & its functioning, etc., to GTRS's Customers and notifying GTRS of any consumer complaints and Monitor regulatory developments (including establishing and maintaining contact with regulatory agencies, etc.) satisfies condition number (ii) mentioned above. 5.5.6 Further, from the applicant's submissions it is clear that, they are not providing services on their own account. Actually, they appear to be providing the service of connecting the business of GTRS with customers with an intention of promoting such business of GTRS in India. Applicant will be connecting....