TaxTMI 
TaxTMI 
2022 (10) TMI 310
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....sed the following question for advance ruling in the application for Advance Ruling filed by it. "(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 'zero rated supply ' under Section 16 of the Integrated Goods and Services Tax Act. 2017." 4. The appellant has submitted that; they are engaged in the manufacture and supply of diamond cutting tools and other innovative tools required by the construction industry such as Diamond wheels. Diamond core bit drill. Grinding wheels. Grinding plate. Easy cut diamond segments. Flange Barrel and Frame Straw/Gang saw blades; they have been granted approval from the Development Commissioner (KASEZ) to operate as an 100% Export Oriented Unit (EOU); 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; they are carrying out acti....
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....T Act, 2017 and thereby qualify as an 'export of service'; while the location of the appellant is in India in terms of Section 2(15)(a) of the IGST Act, the recipient of services (i.e. foreign companies) are located outside India in terms of Section 2(14)(d) of the IGST Act; a bare perusal of Section 13 of the IGST Act would reveal that generally the place of supply of services shall be the location of the recipient of services in terms of Section 13(2) of the IGST Act. except in case of the services specified in sub-sections (3) to (13) of the IGST Act. 5. The Gujarat Authority for Advance Ruling (herein after referred to as 'the GAAR'). vide Advance Ruling No. GUJ/GAAR/R/26/2021 dated 09.07.2021, inter-alia observed that; the goods were sent by Hilti Aktiengesellschaft, the recipient of service to the appellant which are required to be made physically available to the appellant, so that appellant conducts various tests and R&D activities on the said goods and prepare the results and supply the subject service to the recipient; this situation is covered at Section 13(3)(a) of IGST Act; as per said section 13(3)(a) of IGST Act, the place of supply of the following ....
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....uction of Place of Provision of Service Rules 2012. That in the case of Commissioner v B.A. Research India Ltd. 2010 (18) STR 439 it was held that the performance of testing and analysis has no value unless and until it is delivered to its client; thus delivery of report to its client is an essential part of the service, which was delivered and used outside India; therefore it should be construed as export of service; that in the instant case, the samples get consumed in the process of R&D. accordingly in the light of the submissions and legal decisions cited hereinabove, the place of supply in case of R&D services would be the location of the service recipient in terms of Section 13(2) of the IGST Act; thus the service recipient being a foreign entity, is located outside India; therefore, the place of supply of the service would be outside India. 6.2 The appellant further submitted that; the payment for such service has been received in convertible foreign exchange; and the appellant and the recipient of service (i.e. foreign company) are not merely establishments of a distinct person in accordance with explanation 1 in Section 8 of the CGST Act; that in light of the submissions....
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.... by the appellant and the detailed report is provided to M/s.HAG after carrying out R&D testing thereon. The R&D services are provided to M/s. HAG to create knowledge for developing new products. If the results of the R&D activity are eligible for intellectual property right protection, M/s. HAG will be entitled to apply for the same; these goods on which testing activity is undertaken are getting exhausted in the process and are not supplied by the appellant to M/s. HAG; therefore the ARA has given the impugned ruling based on incorrect set of facts, which position need to be rectified; the record of proceedings need to be adequately corrected and ruling given on the correct set of facts; the appellant seeks additional time of 3 weeks to make detailed submissions alongwith evidences to justify the aforesaid position. FINDINGS:- 8. We have carefully gone through and considered the appeal and written submissions filed by the appellant, submissions made at the time of personal hearing. Advance Ruling given by the GAAR and other material available on record. 9. Before going into the merits of the case, we find it proper to decide on the submission made by the authorized representat....