2019 (4) TMI 151 - AAR - GST

Intermediary services or not - management consultancy services - Section 2(13) of The Integrated Goods and Services Tax Act, 2017 - place of supply of services - Held that - The services provided by the applicant will appropriately fall under the SAC 9983 as management consultancy services as the applicant is directly providing service to his clients and is not engaged in facilitating or arranging the supply of goods or services or both between two or more persons as in the case of intermediary services. Accordingly the service provided by the applicant is rightly classified under Management Consultancy Services and does not come within the meaning of the term intermediary as defined in Section 2(13) of IGST Act, 2017. Section 13 of the IGST Act, 2017 lays down the principles for determining the place of supply of services where the location of supplier or location of recipient is outside India. The question essentially involves the determination of the Place of Supply of the services supplied by the applicant which is beyond the jurisdiction of the Advance Ruling Authority.

Summary

Issues:
1. Whether the applicant providing management consultancy services falls under the definition of an "intermediary" as per Sec.2(13) of The Integrated Goods and Services Tax Act, 2017?
2. Whether the management consultancy services provided by the applicant qualify as "Intermediary Services" under Sec. 13(8) (b) of the Integrated Goods and Services Tax Act, 2017?

Analysis:
1. The applicant, a resident of India, offers management consultancy services to foreign clients without engaging any staff. The consultancy involves various business sectors and includes advising on sales growth, margin improvement, and team training. The applicant receives fixed monthly fees in foreign exchange. The applicant sought clarification on being classified as an "intermediary" under Sec.2(13) of the IGST Act, 2017. The Authority examined the consultancy contracts and noted that the services provided by the applicant fall under management consultancy services as per the Scheme of Classification of Services. Since the applicant directly provides services to clients and does not arrange or facilitate goods/services between parties, the Authority ruled that the applicant does not qualify as an "intermediary" under the Act.

2. The second issue pertains to whether the management consultancy services provided by the applicant constitute "Intermediary Services" under Sec. 13(8) (b) of the IGST Act, 2017. The Act outlines principles for determining the place of supply of services in cases where the supplier or recipient is outside India. The Authority clarified that determining the "Place of Supply" for services provided by the applicant falls outside its jurisdiction. Therefore, the ruling on whether the management consultancy services qualify as "Intermediary Services" under this section was not within the purview of the Advance Ruling Authority.

In conclusion, the Authority ruled that the applicant's provision of management consultancy services does not categorize them as an "intermediary" under Sec.2(13) of the IGST Act, 2017. Additionally, the determination of whether the services provided fall under "Intermediary Services" as per Sec. 13(8) (b) of the Act was deemed beyond the Authority's scope, as it involves the place of supply, which is not under its jurisdiction.