TaxTMI 
TaxTMI 
Clarification on place of supply of data hosting services provided by service providers located in India to cloud computing service providers located outside India
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....mputing service providers located outside India - Issued -Reg. Ref: 1. Central Circular No. 159/15/2021-GST, dated 20.09.2021. 2. CCST's Proceedings in File Computer No. 1531175 File No: REV03-12039/72/2021-CCT, dated 11.10.2021. 3. Central Circular No.232/26/2024-GST, dated 10.09.2024 issued by the Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, Government of India, New Delhi. *** ORDER: Representations have been received from the trade and industry seeking clarification on the place of supply in case of data hosting services provided by service providers located in India to cloud computing service providers located outside India. 2. Issue 2.1 It has been represented that....
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....ta hosting service provider qualifies as 'Intermediary' between the cloud computing service provider and their end customers/users/subscribers as per Section 2(13) of the IGST Act and whether the services provided by data hosting service provider to cloud computing service providers are covered as intermediary services and whether the place of supply of the same is to be determined as per section 13(8)(b) of IGST Act. 3.1.1 As per section 2(13) of the IGST Act, read with CCST's Proceedings in File Computer No.1531175 File No: REV03-12039/72/2021-CCT, dated 11.10.2021, a broker, agent or any other person who arranges or facilitates the main supply of goods or services or both or securities and has not involved himself in....
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....bscribers for data storage, analytics, artificial intelligence, machine learning, processing, database analysis and deployment services, etc.. The end users/customers/subscribers access cloud computing services seamlessly over the internet through technology hosted on data centers. There appears to be no contact between data hosting service provider and the end users/ consumers/ subscribers of the overseas cloud computing service provider. Thus, it is observed that the data hosting service provider provides data hosting services to the cloud computing service provider on principal-to-principal basis on his own account and is not acting as a broker or agent for facilitating supply of service between cloud computing service providers and thei....
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....ntly handled, operated, monitored and maintained by them. These data hosting service providers are charging their clients (cloud computing service providers), the charges for the services being provided by them to these clients as consideration depending on the specific terms and conditions as per agreements between them. From the above, it is observed that throughout the provision of the said services, the data hosting service provider owns premises for data center or operates data center on leased premises, independently handles, monitors and maintains the premises, hardware and software infrastructure, personnel and in such scenario, the overseas cloud computing service providers cannot be considered to own the said infrastructure and ma....
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....ermined under section 13(3)(a) of the IGST Act. 3.3 Whether the data hosting services are provided directly in relation to "immovable property" and whether the place of supply of the same is to be determined as per section 13(4) of the IGST Act. 3.3.1 Section 13(4) of the IGST Act provides for the place of supply where services supplied are directly in relation to immovable property. 3.3.2 In the present scenario, it is observed that the data hosting service providers either use owned or leased premises for keeping IT infrastructure and other hardware required for providing data hosting services. They also procure hardware, uninterrupted power supplies, backup generators, ventilation and cooling equipment, network conne....