2026 (5) TMI 1568

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....licant by fraud 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. M/s. Sampurnam Hosieries Impex Private Limited, Coimbatore (hereinafter referred to as the "Applicant") is an exporter of garments. 2. They have sought ruling on the liability of GST on the following services : a. One of the directors of the company is a foreign national. He is planning to make the marketing and sourcing of orders. His commission will be @ 15% of the invoice value. What will be the tax liability in this case? b. Marketing agents are foreigners and they will be paid at 20% of the invoice value for marketing. What will be the tax liability in this case? ....

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.... find that under the application for advance ruling filed, the applicant has raised the following queries - a. One of the directors of the company is a foreign national. He is planning to make the marketing and sourcing of orders. His commission will be @ 15% of the invoice value. What will be the tax liability in this case? b. Marketing agents are foreigners and they will be paid at 20% of the invoice value for marketing. What will be the tax liability in this case? c. Clearing and forwarding will be done in foreign country by a foreign company/individual. What will be the tax liability in this case? 5.3 Section 97(2) of the CGST Act, 2017 specifies the nature of questions on which an advance ruling can be sought, and the same is reproduced as below :- "(2) The question on which the advance ruling is sought under this Act, shall be in respect of,- (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deeme....

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...., the applicant is located in India, thus satisfying conditions (i) and (ii) above. In respect of the place of supply of service, Section 13 of the IGST Act, 2017 states as follows :- "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 be the location of the recipient of services :" The supplier of service, the director of the company, Mr. Schugk is outside India. Section 13(2) of the IGST Act, 2017 lays down that the location of recipient of services shall be place of supply. Thus the place of supply in this instance is India, being the location of recipient of services viz., the applicant and consequently, the services received by the applicant falls under the definition of "Import of services" as per Section 2(11) of the IGST Act, 2017 5.8 As per section 7(4) of the IGST Act, 2017, supply of service....

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.... down under Section 2(13) of the IGST Act, 2017. 6.3 Section 2(11) of the IGST Act, 2017 provides that "import of services" means the supply of any service, where- (i) The supplier of service is located outside India; (ii) The recipient of service is located in India; and (iii) The place of supply of service is in India;" In the instant case, the conditions at (i) and (ii) above are satisfied as the supplier of service - the marketing agent, is located outside India and the recipient of service, the applicant is located in India. In respect of clause (iii) of the section ibid, it is seen that section 13(8) of the IGST Act, 2017 is relevant to the issue in hand which stipulates that in the case of intermediary services, the place of supply shall be the location of supplier of services. Thus clause (iii) is not satisfied as the place of supply is not India. 6.4 Thus the services received by the applicant is out of the ambit of "Import of services" in as much as clause (iii) of Section 2(11) of the IGST Act, 2017 is not fulfilled. Therefore, we hold that GST under reverse charge is not payable on the commission paid to foreign marketing agents. 7....