Section 2 - Definitions.

Section 13 - Place of supply of services where location of supplier or location of recipient is outside India.

INTEGRATED GOODS AND SERVICES TAX ACT, 2017

2018 (11) TMI 959 - AUTHORITY FOR ADVANCE RULING 

Levy of GST - palace of supply of services - providing back office services to overseas clients - scope of the definition and term “intermediary” -  back office administrative and accounting support - applicant is providing back office support services, payroll processing, to main records of employees to overseas companies i.e. clients and after finalization of purchase / sale between the client and its customers.

Activities includes but not limited to coordinate with buyers, sellers and other necessary parties for execution of purchase and sell contract - liaison and follow-up with supplier and buyers of goods - processing payments - arranging transportation, customs clearance etc. - remuneration is received per purchase, per sale

Authority for advanced rulings has held that:-

Applicant is providing back office support services, payroll processing, to main records of employees to overseas companies i.e. clients and after finalization of purchase / sale between the client and its customers.

Applicant is clearly covered and falls within in the definition of an intermediary as defined under the IGST Act. - Section 13(8) of the IGST is applicable in this case to determine place of supply – In the instant case and as per the applicant’s own admission, the applicant is supplier of services. - The place of supply in case of services provided by the applicant being intermediary would be the location of supplier of services.

To qualify a transaction of supply of services as export of services that transaction has to satisfy all five ingredients of the definition of export of services simultaneously. In the present case we find that the condition at (iii) of the section 2(6) of the IGST Act, is not satisfied, the services proposed to be rendered by the applicant do not qualify as “export of services” and thus not a “zero rated supply” u/s 16(1).

Applicant is liable to GST

 

Full Text of Ruling:

2018 (11) TMI 959 - AUTHORITY FOR ADVANCE RULING 

 

Place of supply rules: intermediary back office services treated at supplier location and not as export, GST applies. The applicant's back office and payroll processing activities qualify as services rendered as an intermediary; under the IGST intermediary rule the place of supply is the supplier's location. The services do not satisfy all conditions for export of services (clause (iii) of the export definition fails) and therefore are not zero rated; GST is payable.