TaxTMI 
TaxTMI 
2024 (11) TMI 326
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....ponding provisions of the KSGST Act, Rules and the notifications issued there under. 3. Applicant requested advance ruling on whether GST is applicable on the revenue paid to them by their principals outside India. 4. The contentions of the applicant: 4.1. The applicant submits that they are representing foreign companies-Ektrontek-Taiwan, H.W. Wallace Co.-England, Alfa Mirage-Japan and Barwell-England for promoting their products used in tyre and rubber industry in the markets of India and Srilanka. In addition to the promotion of the products supplied by the foreign companies, the applicant provides installation and subsequent services based on the pre-agreement between them. The applicant requested clarification on liability of tax un....
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....4. In the second case, the same activity takes place in Srilanka. Products are supplied to customer companies in Srilanka and the applicants engineer's installs the machines at the premises of the customers. As done in India, here also, the applicant provides services such as promoting the foreign suppliers product by liasioning with customers, sending quotations, customer visits, team discussions, technical clarification, etc. Based on such discussions, the customers directly place purchase orders to the foreign suppliers and make payments in respective foreign currencies. Foreign supplier dispatches the products directly to the customers and the applicant's engineers visit the customer premises and install the same. Here also, the....
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....decided proceedings against the applicant under any provisions of CGST/SGST/IGST Act. 6. Personal Hearing: The applicant was granted an opportunity for a personal hearing on 16.01.2024. Shri. Ramamoorthy S, Managing Partner represented the applicant in the personal hearing. The representative reiterated the contentions made in the application and requested to issue a ruling based on the submissions in the application and filed at the time of hearing. 7. Discussion and Findings: The facts of the application and the contentions of the applicant are detailed above. The question is whether GST is applicable on the revenue paid to them by their principals outside India. From the application, it is seen that they earn their revenue from two d....
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....IGST Act, 2017. 7.2. The second activity carried out by the applicant is that of installation of machinery/goods supplied by the principal to various customers in India and Sri Lanka. For such installation work, the applicant claims that they are separately paid by the principal. We are of the opinion that this is a service classifiable under Service Code Heading 9987 [Maintenance, repair and installation (except construction) services]. The activity involved is to install the machinery supplied by the overseas principal to customs in India and Sri Lanka, on behalf of the principal. 7.3. As per Section 2 (6) of the IGST Act, 2017, Export of services means the supply of any services when- (i) the supplier of service is located in India; ....
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....tion of the supplier of services, namely:- (a)... (b) intermediary services; (c)... 7.6. Therefore, for intermediary services, the place of supply of the services shall be the location of the supplier of services. The location of the supplier of service means the location of the applicant, which is in India. Therefore, the place of supply is India and the intermediary service' provided by the applicant cannot be treated as export, irrespective of whether the service is provided in India or Sri Lanka. There is no GST exemption to this service when provided in India. 7.7. However, when both the supplier of goods and recipient of goods are outside India i.e, outside the taxable territory the situation is covered by exemption Notifi....
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....yment of IGST or without IGST on the strength of a letter of undertaking. However, in cases where applicant receives the consideration in Indian currency, or if the applicant and the recipient of service are merely establishments of a distinct person in accordance with Explanation 1 in section 8 of the IGST Act, the same will not amount to export. 7.10. The above discussions are summed up in the following table. Nature of Service Whether constitutes export or not Whether subject to GST. Intermediary services provided in India to the foreign principal. No. Yes. Intermediary services provided in Sri Lanka to the foreign principal. No. Yes-The supply is subject to GST but is exempt under Notification No 20/2019-Integrated Tax (Rate)....