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2022 (4) TMI 1291 - AAR - GSTClassification of services - Consultancy Services rendered to ADB, Manilla - export of services or not - place of supply - Section 2 (6) of the Integrated Goods and Services Tax Act, 2017 - eligibility of refund of GST charged on Invoice issued for Consultancy Services in terms of Section 55 of the Central Goods and Services Tax Act, 2017 or eligibility for exemption as per provisions of the Asian Development Bank Act, 1966 - Constitution of authority for Advance Ruling. HELD THAT - It is seen that the Authority for advance ruling is constituted under the provisions of the State GST Act and shall be deemed to be the Authority for advance ruling in respect of that State under the CGST Act, 2017 also. Thus it can be seen that the Authority for advance ruling is constituted under the respective State Act and not the Central Act. This would mean that the ruling given by the said Authority will be applicable only within the jurisdiction of the concerned state. It is for this reason that questions on determination of place of supply cannot be raised with the Authority of advance ruling. The determination of place of supply is not covered under any of the clauses (a) to (g) of Section 97(2) of the CGST Act 2017. Further, the use of term 'shall', is an imperative command restricting the scope of advance ruling only to the questions enumerated in the said sub-section. Thus, to answer the question relating to determination of place of supply, is beyond the scope of advance ruling. This authority, therefore, cannot answer the first question in the application. The second question regarding eligibility of refund or exemption is a conditional one and comes into existence only if the impugned services of the applicant do not qualify as export of services . The question regarding export of services becomes redundant as the question cannot be answered by this authority. Therefore the instant application is liable for rejection. The application filed by the applicant for advance ruling is hereby rejected.
Issues Involved:
1. Whether Consultancy Services rendered to ADB, Manilla qualify as "export of services" in terms of Section 2(6) of the IGST Act, 2017. 2. If not qualifying as "export of services," whether ADB should obtain a refund of GST charged on invoices or if the services are exempt under the ADB Act, 1966. Issue-Wise Detailed Analysis: 1. Qualification as "Export of Services": - Applicant's Argument: - The applicant, IBI Group India Pvt. Ltd., argues that their consultancy services should qualify as "export of services" under Section 2(6) of the IGST Act, 2017. They outline that the conditions for "export of services" include: 1. Supplier of service located in India. 2. Recipient of service located outside India. 3. Place of supply of service is outside India. 4. Payment received in convertible foreign exchange. 5. Supplier and recipient are not merely establishments of a distinct person. - They contend that their services are not directly related to immovable property, thus the place of supply should be determined as per Section 13(2) of the IGST Act, which would be the location of the recipient (ADB in this case, located outside India). - Authority's Analysis: - The Authority for Advance Ruling (AAR) notes that for services to qualify as "export of services," the place of supply must be outside India. - The AAR examines whether it has the jurisdiction to determine the place of supply. It references Section 97(2) of the CGST Act, which lists the questions on which advance ruling can be sought, excluding the determination of the place of supply. - The AAR cites previous rulings and the Kerala High Court's judgment, which suggests that determining the place of supply is crucial for determining tax liability. However, the AAR concludes that it lacks jurisdiction to determine the place of supply as it is not explicitly covered under Section 97(2). 2. Refund or Exemption under ADB Act: - Applicant's Argument: - The applicant argues that if their services do not qualify as "export of services," then ADB should either obtain a refund of GST under Section 55 of the CGST Act or the services should be exempt under the ADB Act, 1966. - They reference Section 55 of the CGST Act, which allows specified multilateral financial institutions like ADB to claim refunds on taxes paid. - They also cite the ADB Act, which exempts ADB from all taxation and customs duties. - Authority's Analysis: - The AAR notes that the second question is conditional and only relevant if the services do not qualify as "export of services." - Since the AAR cannot determine the place of supply, it cannot address whether the services qualify as "export of services." Consequently, the second question becomes redundant. Findings and Conclusion: - The AAR concludes that it does not have jurisdiction to determine the place of supply, which is essential to decide if the services qualify as "export of services." - Without determining the place of supply, the AAR cannot address the second question regarding refunds or exemptions. - Therefore, the application for advance ruling is rejected. Ruling: - The application filed by the applicant for advance ruling is rejected for the reasons mentioned above.
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