AI Drafter 
TaxTMI 
TaxTMI 
2026 (2) TMI 715
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....ud or suppression of material facts or misrepresentation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (herein referred to as the Act) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act. Shri. JOLARPETTAI VEERAMUTHU SREEDHAR, having principal place of business at 5/63, 1604, Birchwood, Rajiv Gandhi Salai, Egattur, Chengalpattu, Chennai-603103 (hereinafter called as the "Applicant") has registered with GSTIN 33ALIPS2621J1Z3 under the goods and services tax Act. They have filed this application for advance ruling under Section 97 of the CGST Act, 2017, and corresponding provisions under the Section 97 of TNGST Act, 2017. The Applicant has made a payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST Rules, 2017 and TNGST Rules, 2017. 2. The Applicant, namely, S....
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....arification on the following questions: i) Whether the place of supply of service rendered by the Applicant is outside India? ii) Whether the service rendered by the Applicant can be deemed to be 'export of services' under the IGST Act, 2017 and therefore be a zero-rated supply? iii) Whether the service rendered by the Applicant shall attract payment of any Goods and Service Tax (GST) and if yes, then the amount of GST that is payable by the Applicant considering the fact that major portion of the service is rendered outside India? 3. Applicant's interpretation of law: 3.1 The Applicant submits that the present act of the Applicant to refraining from competing with the business of M/s. SmartPoint Technologies Pvt Ltd., and the business of the purchasers will amount to supply of service as provided under Clause 5(e) of Schedule II of the GST Act, 2017, which reads as follows :- "5. Supply of services The following shall be treated as a supply of services, namely: ........................ (e) agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; and" The applica....
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.... 3.3 They referred to section 13(2) of the IGST Act, 2017, the place of supply of service, except services specified in sub-section (3) to (13) of Section 13, shall be the location of the recipient of the service. In the present case, the service proposed to be done by the applicant does not fall within any of the sub-sections mentioned above and consequently, the service provided by the applicant will be deemed to be at a place outside India. This is for the reason that M/s. RFXCEL Corporation is purchasing nine thousand nine hundred and ninety-nine (9,999) shares of M/s. SmartPoint Technologies Pvt Ltd. and M/s. Antares Vision Indian Pvt Ltd. is purchasing one (1) share. Further, the entire sale consideration for purchase of the entire ten thousand (10,000) shares is being paid by M/s. RFXCEL Corporation. The Applicant should not directly or indirectly compete with the business of M/s. Antares Vision India Pvt Ltd. or with the business of M/s. Smart Point Technologies Pvt Ltd., the recipient of service, but that the service provided by the Applicant is predominantly to M/s. RFXCEL Corporation and therefore, the place of supply of service is outside India. Accordingly, the entire ....
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.... 2,67,321.60 from M/s. RFXCEL for refraining from competing with the business of M/s. SmartPoint Technologies Pvt Ltd., and business of the purchasers. The AR stated that both the purchasers are subsidiary of Antares Vision Group. RFXCEL does business outside India. The AR referred to the Annual Audit Report of Antares Vision Group which shows that majority of business outside India. Only 6.5% from Asia-Oceanic. The AR claimed that since majority of the business of the purchasers are outside India, it amounts to Export of Services as per Section 2(6) of CGST Act, 2017, hence, GST is not leviable on the non-compete fee. The AR referred to the pages of copy of the agreement between the applicant and the purchasers in support of their claim. Members called for the details of segregation of non-compete fee pertaining to services within India and outside India. The AR assured the submission of the same. 5.3 The applicant vide their Additional Submissions dated 22.10.2025 has stated that as regards the question of proportionate value of the non-compete fee received by them for services rendered within India and outside India, the applicant along with two other individuals, being joint....
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....e Authority for Advance Ruling to exempt the applicant from payment of GST on the amount of non-compete fee of Rs. 2,21,53,926/- received for services rendered outside India. The applicant requested for another personal hearing to explain the above factual and legal position in person. 5.7 Shri. Mohammed Ovaisullah Muhsin, Advocate appeared for the second personal hearing on 11.11.2025. The Authorised Representative (AR) referred to the additional submissions made by the applicant after their earlier personal hearing. The AR stated that Place of Supply is only incidental to determine the taxability or otherwise of the applicant's activity and would be covered under Section 97(2)(e) of CGST/TNGST Act, 2017 under "determination of the liability to pay tax on any goods or services or both". In respect of segregation of non-compete fee, the AR stated that they had made the segregation based on Domestic Supply and Export Supply of M/s. SmartPoint Technologies prior to sale of applicant's shares and post-sale. He further explained that the Track and Trace mechanism is an expensive software and also not legally mandated in India. However, Track and Trace mechanism is legally mandated o....
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....he date of the agreement and that the applicant is to be compensated with a fee for such act of not competing with their businesses. 6.5 We get to understand that M/s. RFXCEL Corp does business in USA and other places outside India and M/s. Smart Point Technologies and M/s. Antares Vision carry out their business activity in India. As per the non-compete non-solicitation agreement, the applicant cannot do business in the places in which M/s. RFXCEL Corp does business outside India. The applicant also cannot do business in the places in which M/s. Smart Point Technolgies and M/s. Antares Vision do business in India. In effect, the applicant cannot do business in all the places where the purchasers are operating. 6.6 Under the facts and circumstances of the instant case, our primary objective would be to analyse and ascertain as to whether the applicant is involved in any "Supply of Service". In this regard, we refer to Schedule II of CGST Act, 2017 which enlists the activities that are to be treated under the category of 'Supply of Services', i.e., 5. Supply of services The following shall be treated as supply of services, namely :- (a) renting of im....
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....of supply of service rendered by the applicant is outside India? In this regard, we find that as per Section 97(2) of the CGST Act, 2017, any question relating to 'Place of Supply' is one of the matters on which Advance Ruling cannot be sought. However, in the instant case, it is seen that "determination of the liability to pay tax on any goods or services or both" is covered under Section 97(2)(e) of the Act, ibid, and in order to determine the same in respect of the query nos. 2 & 3, the 'Place of Supply' has to be ascertained. We observe that Section 13 of the IGST Act, 2017, deals with the situation relating to the 'Place of supply' of services where location of supplier or location of recipient is outside India, and the same reads as under :- "Section 13. Place of supply of services where location of supplier or location of recipient is outside India- (1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India. (2) The place of supply of services except the services specified in sub-sections (3) to (13) shall....
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....ct payment of any Goods and Service Tax (GST) and if yes, then the amount of GST that is payable by the Applicant considering the fact that major portion of the service is rendered outside India? Moving on to the activity of the applicant refraining from competing with the activities pertaining to M/s. Smart Point Technologies and M/s. Antares Vision India, both of which are operating in India and as such would either fall under 'Inter-state' supply or 'Intra-state' supply as per Section 7 of Section 8 of the IGST Act, 2017 which reads as below :- Section 7. Inter-State supply.- (3) Subject to the provisions of section 12, supply of services, where the location of the supplier and the place of supply are in- (a) two different States; (b) two different Union territories; or (c) a State and a Union territory, shall be treated as a supply of services in the course of inter-State trade or commerce. Section 8 Intra-State supply 2) Subject to the provisions of section 12, supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated ....