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2019 (11) TMI 398 - AAAR - GSTLevy of GST - Place of supply - Advisory Management Fees received in Indian Currency from Domestic Contributors located in India for the Services rendered by the Appellant - Advisory Management Fees received in Foreign Currency from Overseas Contributors located outside India for the Services rendered by the Appellant - scope of Person Liable to make the Payment - AAR has held that the GST is leviable on the Investment Advisory and Management Fees collected from both the Domestic as well as the Overseas Investors, as the said services of Investment Advisory and Management services have been rendered to the AIF (Alternate Investment Fund), and not to the Domestic or Overseas Investors - challenge to AAR decision. HELD THAT - To decide the taxability of the above said Investment Advisory and Management Fees, it is imperative to determine the place of supply in respect of the impugned overseas transactions. Further, on perusal of the provisions under Section 97(2), reproduced herein above, it is adequately clear that question on determination of the 'place of supply' has been excluded from the above mentioned specific and exhaustive set of questions, in respect of which advance ruling can be sought under the CGST Act. This clearly indicates that we cannot pass any ruling in respect of the question which involves the determination of the place of supply of the goods or services or both. It can decisively be concluded that the question posed by the Appellant i.e. whether the GST is applicable on the Investment Advisory and Management Fees collected from the overseas Investors, is beyond the jurisdiction of the Advance Ruling, and hence cannot be decided by the Advance Ruling Authority.
Issues Involved:
1. Applicability of GST on Advisory & Management Fees received from Domestic Contributors. 2. Applicability of GST on Advisory & Management Fees received from Overseas Contributors. 3. Jurisdiction of the Advance Ruling Authority to determine the place of supply. Issue-wise Detailed Analysis: 1. Applicability of GST on Advisory & Management Fees received from Domestic Contributors: The Appellant, an Investment Advisory Firm, provides Investment Advisory & Management Services and receives fees from Domestic Contributors. The Appellant contends that these services fall under SAC Code 997153 and are liable to GST at 18%. The AAR ruled that GST is applicable since the services are rendered to the AIF, which is constituted in India. The Appellant argues that the Contributors, not the AIF, are the recipients of the services, as they are liable to pay the fees directly to the Appellant. 2. Applicability of GST on Advisory & Management Fees received from Overseas Contributors: The Appellant asserts that services provided to Overseas Contributors qualify as "Export of Services" under Section 2(6) of the IGST Act, 2017, and should be treated as Zero Rated Supply under Section 16 of the IGST Act, 2017. The AAR, however, concluded that the services are rendered to the AIF, which is in India, and thus subject to GST. The Appellant argues that the Overseas Contributors are the recipients as per the agreements, and the services meet all conditions for export, including payment in convertible foreign exchange and the supplier and recipient being distinct persons. 3. Jurisdiction of the Advance Ruling Authority to determine the place of supply: The AAAR examined whether it had the legal jurisdiction to decide the taxability of the fees collected from both Domestic and Overseas Contributors. Section 97(2) of the CGST Act, 2017, outlines the specific questions for which advance ruling can be sought, excluding the determination of the place of supply. The AAAR concluded that the question posed by the Appellant involves determining the place of supply, which is beyond the jurisdiction of the Advance Ruling Authority. Therefore, the AAAR set aside the AAR's ruling, stating that the AAR should have refrained from passing any ruling on this matter. Order: The AAAR concluded that the questions asked by the Appellant are not within the jurisdiction of the Advance Ruling Authority. Consequently, no ruling can be passed in this case, and the previous ruling by the AAR is set aside.
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