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2020 (7) TMI 112 - AAR - GSTIT software related consulting services - Export of services or not - services provided by the applicant to the foreign client through the Principal - ITC claim - payment of fees received by him in INR from the Principal - Export Remittance - levy of IGST or CGST and SGST - HELD THAT - In the instant case, the applicant provides IT software related consulting services in the area of Oracle ERP w.r.t Oracle Financials to Doyen for a consultancy fee laid down in the consultancy agreement. Therefore, the said activity satisfies the conditions of Section 7(1) a) and is a supply under GST. As per Para 5 of Schedule II read with Section 7(1A), this supply is a supply of services. Therefore, the applicant is liable to pay GST at appropriate rates on the supply of consultancy services to Doyen. In respect of the questions whether, such supply of services is export of services . zero-rated supply and eligibility of refund, this authority cannot answer the questions as they are not covered in Section 97(2) of the CGST/TNGST Act.
Issues Involved:
1. Whether the services provided by the applicant shall be treated as local services or export of services. 2. Whether the applicant is liable to pay GST on such services provided to the US Client directly. 3. Whether the benefit of zero-rated supply can be availed by him for his services. 4. Whether he is eligible for a refund of taxes already paid in the past if the refund is within the time limit provided under the GST Act. Issue-wise Detailed Analysis: 1. Whether the services provided by the applicant shall be treated as local services or export of services. The applicant is engaged in providing IT software-related consulting services in the area of Oracle ERP. The applicant entered into a contract with an Indian GST-registered IT company (Principal) to provide support services to a US-based client. The applicant contended that since the services are rendered directly to the US client, they should be treated as export of services. However, the authority noted that the applicant is not a party to the contract between the Principal and the US client and is paid by the Principal in INR based on the conversion rate. The authority concluded that the services provided by the applicant to the Principal are local services and not export of services. The Principal is the recipient of the services, not the US client. 2. Whether the applicant is liable to pay GST on such services provided to the US Client directly. The authority determined that the applicant provides services to the Principal, who in turn provides services to the US client. Therefore, the applicant is liable to pay GST on the services provided to the Principal. The services provided by the applicant fall under the category of "supply of services" as per Section 7(1)(a) of the CGST/TNGST Act, and the applicant is required to pay GST at the appropriate rates on these services. 3. Whether the benefit of zero-rated supply can be availed by him for his services. The authority did not address this issue, stating that it is not within the ambit of the Advance Ruling Authority as per Section 97(2) of the CGST/TNGST Act. 4. Whether he is eligible for a refund of taxes already paid in the past if the refund is within the time limit provided under the GST Act. Similar to the third issue, the authority did not provide a ruling on the eligibility for a refund of taxes already paid, as it is not covered under Section 97(2) of the CGST/TNGST Act. Ruling: 1. The services provided by the applicant to the Principal are considered a supply of services under the CGST/TNGST Act, and the applicant is liable to pay relevant tax on such supply. 2. The other questions raised by the applicant were not answered as they do not fall within the scope of the Advance Ruling Authority as per Section 97(2) of the Act.
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