2018 (10) TMI 345 - AAR - GST

Maintainability of Advance Ruling application - Section 97(2) of the CGST Act, 2017 and Gujarat Goods and Services Tax Act, 2017 - Supply of services - whether the consideration received from M/s. Pearson VUE, for Tax Invoice No. 001 dated 31st July, 2017 for conducting test on behalf of M/s. Pearson VUE in India is export of services u/s 16(1)(a) of the IGST Act or not? - If the answer of the above question is negative then transaction of supply of services is intra state supply of service or interstate supply of services? Held that - The issue whether the consideration received by the applicant from M/s. Pearson VUE for Tax Invoice No. 1 dated 31.07.2017 for conducting test on behalf of M/s. Pearson VUE in India is export of service under the provisions of the IGST Act, 2017 can be determined in light of various provisions of the IGST Act, 2017, including Section 2(6), which defines export of services - Thus, one of the important requirements of supply of any service to be treated as export of service is that the place of supply of service is outside India. Thus, the entire issue is intrinsically related to determination of place of supply of service by the applicant. This authority has been constituted in exercise of the powers conferred by section 96 of the Gujarat Goods and Services Tax Act, 2017, which Act extends to the whole of the state of Gujarat. This authority is a creature of statute and has to function within the legal boundary mandated by the Act. As the place of supply is not covered by Section 97(2) of the Acts, this authority is helpless to answer the question raised in the application, as it is lacking jurisdiction to decide the issues. The jurisdiction of this authority does not extend to the questions on determination of place of supply . The application for Advance Ruling of Take Off Academy is rejected, under sub-section (2) of section 98 of the CGST Act, 2017 and the GGST Act, 2017.

Summary

Issues:
1. Whether the consideration received for conducting tests in India constitutes export of services under the IGST Act?
2. If not, whether the supply of services is intra-state or interstate?

Analysis:
1. The applicant, Take Off Academy, sought an advance ruling on whether the consideration received from conducting tests for M/s. Pearson VUE in India qualifies as an export of services under the IGST Act. The applicant argued that as per the agreement, they provide facilities for electronic test delivery in India to M/s. Pearson VUE, with key activities including test administration and vigilance. They contended that since the services are provided to a recipient outside India and payment is received in foreign exchange, it should be considered an export of service as a zero-rated supply under relevant provisions of the IGST Act.

2. The jurisdiction of the Advance Ruling Authority to decide on the matter was questioned during the hearings. The applicant referenced Section 97(2) of the CGST Act, 2017, and Section 20 of the IGST Act, 2017, to support their argument that the authority had the jurisdiction to determine the liability to pay tax. However, the Authority clarified that its jurisdiction is limited to specific issues outlined in Section 97(2) of the Acts, which do not include the determination of the place of supply. The Authority highlighted that the question of whether the place of supply is outside India is crucial in deciding if the services qualify as an export, but it falls outside the scope of issues the Authority can rule on.

3. The definition of "export of services" under Section 2(6) of the IGST Act specifies conditions such as the location of the supplier and recipient, place of supply, and payment in foreign exchange. The applicant's case hinged on the place of supply being outside India. However, as the Authority's jurisdiction does not cover determining the place of supply, they were unable to rule on the issue. Citing precedents from West Bengal and Kerala Advance Ruling Authorities, the application was rejected on grounds of lack of jurisdiction, without delving into the merits of the case.

In conclusion, the Advance Ruling Authority rejected the application from Take Off Academy, emphasizing the limitations of its jurisdiction and inability to rule on issues related to the place of supply, which was crucial in determining the export status of the services provided to M/s. Pearson VUE in India.