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2019 (7) TMI 1476 - AAAR - GSTClassification of services - Support services or Intermediary Services - export of services - scope of services - Composite/Mixed supply - maintainability of Advance Ruling - HELD THAT - Only those application will not be admitted before the Advance Ruling Authority, wherein the questions raised in the application are already pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act. Since there is no issue pertaining to the GST Act which is pending or decided in any proceedings in the case of an applicant under any of the provisions of this Act, the Advance Ruling application filed by the Respondent before the Advance Ruling Authority is clearly maintainable. Whether the service supplied by the Respondent under the Service Agreement dated 1 March 2013 constitute a supply of Support Services falling under HSN code 9985 or Intermediary service classifiable under HSN code 9961/9962? - HELD THAT - Since all these activities undertaken by the Respondent could have been performed separately and independently with each other, the fact that the Respondent is raising a singly consolidated invoice in accordance with Clause 9 of the Service Agreement dated 01.03.2013 as amended on 05 January 2017 makes these supplies stipulated under this Agreement as mixed supply in terms of the provision of Section 2(74) of the CGST Act, 2017 - it may verily be inferred that the services performed by the Respondent in terms of the above Service Agreement dated 01.03.2013 as amended on 05.01.2017 is the mixed supply - The service supplied by the Respondent under the Service Agreement dated 1 March 2013 constitutes a mixed supply of services falling under the Heading accounting services having SAC 9982, and under the Heading other professional, technical and business services having the SAC 9983. Whether the service supplied by the Respondent under the Marketing Services Agreement dated 1 December 2012 constitute a supply of Support services falling under HSN code 9985 or Intermediary service classifiable under HSN code 9961/9962? - HELD THAT - The Respondent is performing a spectrum of services, of which the following services can be classified under the service Heading Research and Development services having SAC 9981 - Respondent is arranging or facilitating the business of its parent company i.e. Asahi Kasei Japan by liaising with the customers, prospective customers of its parent company i.e. Asahi Kasei Japan by way of collecting their product development plans and strategy and road-maps , as well as their product specifications, and reporting these information to its parent company, by connecting Customers with representatives of the service recipient for the purpose of obtaining orders and establishing and maintaining close commercial relationships between service recipient and customers, and by providing information on products and its functioning or similar such services to service recipient s customers and notifying service recipient of any consumer complaints. Thus, it can conclusively be deduced that the Respondent is playing a very significant role in this supply chain of the Products manufactured and distributed by its parent company to its distributors located in India - The service supplied by the Respondent under the Marketing Services Agreement dated 1 December 2012 constitutes a mixed supply of Services falling under the Heading Research and Development services having SAC 9981, under the Heading Other professional, technical and business services bearing SAC 9983, and under the Heading other miscellaneous services bearing SAC 9997. Whether the service provided by the Respondent is an export of services as defined under Section 2(6) of the Integrated Goods and Service Tax Act 2017? - Scope of Advance Ruling application - HELD THAT - It is observed that whereas the determination of the place of supply of services is one of the prerequisites for determining any supply of services to be export of services, determining the place of supply of services or goods is not in the jurisdiction of the Advance Ruling Authority as is clearly evident from Section 97(2) of the CGST Act, 2017, which prescribes the set of 7 questions in respect of which Advance Ruling can be sought under the provision of the CGST Act, 2017 and the said 7 questions excludes the question related to the determination of the place of supply - the Advance Ruling Authority has clearly transcended its scope and jurisdiction by deciding upon the question related to the export of services.
Issues Involved:
1. Classification of services supplied under the Service Agreement dated 1 March 2013. 2. Classification of services supplied under the Marketing Services Agreement dated 1 December 2012. 3. Determination of whether the services provided constitute an export of services under Section 2(6) of the Integrated Goods and Service Tax Act 2017. Detailed Analysis: Issue 1: Classification of Services under the Service Agreement dated 1 March 2013 The Respondent provided various services to its parent company, Asahi Kasei Japan, including corporate accounting, finance, personnel and labor relations, research and development, quality assurance, and intellectual property. The services also included providing economic, industrial, and technical information, conducting market surveys, and offering necessary business assistance. The Appellate Authority concluded that these services are a mixed supply under Section 2(74) of the CGST Act, 2017, as they could be performed separately and independently. The services were classified under: - SAC 9982 for accounting services. - SAC 9983 for other professional, technical, and business services. Issue 2: Classification of Services under the Marketing Services Agreement dated 1 December 2012 The Respondent provided services such as conducting market surveys, assisting in advertising policy implementation, participating in industry events, liaising with customers, providing feedback, arranging discussions, and monitoring regulatory developments. The Appellate Authority classified these services as a mixed supply under: - SAC 9981 for Research and Development services. - SAC 9983 for other professional, technical, and business services. - SAC 9997 for other miscellaneous services. Issue 3: Determination of Export of Services The Advance Ruling Authority initially ruled that the services provided by the Respondent constituted an export of services under Section 2(6) of the IGST Act, 2017. However, the Appellate Authority found that determining the place of supply, a prerequisite for defining export of services, is beyond the jurisdiction of the Advance Ruling Authority as per Section 97(2) of the CGST Act. Conclusion and Order: 1. Service Agreement dated 1 March 2013: The services constitute a mixed supply falling under SAC 9982 and SAC 9983. 2. Marketing Services Agreement dated 1 December 2012: The services constitute a mixed supply falling under SAC 9981, SAC 9983, and SAC 9997. 3. Export of Services: No ruling was passed regarding the export of services due to jurisdictional limitations on determining the place of supply. The Appellate Authority modified the Advance Ruling Authority's decision accordingly.
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