2019 (6) TMI 1012 - AAR - GST

Scope of Advance Ruling - Levy of GST - Export of services or not - Supply of services by India Branch of M/s. SutherIand Mortgage Services Inc. USA to the customers located outside India - inter company agreement with M/s. Sutherland Mortgage Services Inc. USA - Place of supply - HELD THAT - The entire issue is intrinsically related to determination of place of supply of service by the applicant. In this case the supplier of services is located in India and the recipient of the services is located outside India. As per Sec.13 of IGST Act, the liability to pay tax is dependent upon the place of supply . This authority has been constituted in exercise of the powers conferred by section 96 of the Kerala Goods and Services Tax Act, 2017, which Act extends to the whole of the state of Kerala. 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 .

Summary

Issues:
1. Whether the supply of services by the India branch of a company to customers located outside India is liable to GST.
2. Whether the supply of services qualifies as an "export of service" under the provisions of the IGST Act.

Analysis:

1. The applicant, a company with branch offices in India and the USA, sought an advance ruling on the GST liability of services provided by its India branch to customers outside India. The company had an inter-company agreement with its USA head office for providing services to customers outside India. The India branch directly provided services to customers in the USA, with invoices clearly showing the services provided by the branch. The services were not consolidated at the USA head office, and customers were legally obligated to pay for the services provided by the India branch. The company satisfied the conditions for "export of service" under the IGST Act.

2. The definition of "export of services" under the IGST Act requires the supplier to be in India, the recipient outside India, the place of supply outside India, payment in foreign exchange, and not merely establishments of a distinct person. The determination of "place of supply" is crucial for deciding the tax liability. However, the Advance Ruling Authority lacked jurisdiction to decide on the "place of supply" issue as it was not included in the list of questions for seeking an advance ruling. Therefore, the authority could not rule on whether the services provided qualified as an "export of service" under the IGST Act.

In conclusion, while the services provided by the India branch to customers outside India met the criteria for "export of service," the Advance Ruling Authority could not provide a ruling on the GST liability due to jurisdictional limitations regarding the determination of the "place of supply."