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2022 (4) TMI 1343 - AAR - GSTClassification of services - Marketing Services agreed to be provided by the Applicant under Marketing Services Agreement - covered under supply of Support Services falling under HSN Code 9985 or as Intermediary Services classifiable under HSN Code 9961/9962? - HELD THAT - Since the applicant acts as a conduit between GTRS and customers in India, it therefore appears that the applicant is acting as an intermediary in the subject case. The Applicant has not categorically mentioned whether they are arranging or facilitating supply of goods or services or both but has definitely stated that they connect GTRS with the customers and prospective customers in India. By connecting the customers/prospective customers with GTRS, the applicant is actually arranging or facilitating the supply of goods or services or both, between two or more persons - Since the applicant is satisfying all the conditions of an intermediary, there are no hesitation in holding that, the applicant is an intermediary. As per the provisions of Section 13 (8) of the IGST Act, 2017, it is found that the place of supply in subject case of the applicant as an intermediary would be the location of the supplier of services i.e. the location of the applicant which is located in the State of Maharashtra, India. As the place of supply of intermediary services to GTRS is location of applicant in India and consequently condition of export of services as per Section 2 (6) of IGST Act is not satisfied - question is answered in the negative.
Issues Involved:
1. Classification of Marketing Services: Whether the marketing services provided by the applicant fall under 'Support Services' (HSN Code 9985) or 'Intermediary Services' (HSN Code 9961/9962). 2. Export of Services: Whether the marketing services provided by the applicant qualify as an export of services under Section 2(6) of the Integrated Goods and Services Tax Act, 2017. Issue-wise Detailed Analysis: 1. Classification of Marketing Services: The applicant, Gulf Turbo Solutions LLP (GTS LLP), proposed to provide marketing services to Gulf Turbo Repairs and Services FZC (GTRS) under a Marketing Services Agreement. The scope of services includes conducting market surveys, assisting in sales prospection, liaising with customers, and providing feedback to GTRS. The applicant contended that these services should be classified as 'Support Services' under HSN Code 9985, arguing that they operate on a principal-to-principal (P2P) basis and not as intermediaries. However, the Authority observed that the nature of services such as liaising with customers, connecting prospective customers with GTRS representatives, and providing feedback to GTRS indicates that the applicant acts as a conduit between GTRS and its customers. This implies that the applicant is facilitating the supply of goods or services between GTRS and its customers, fitting the definition of an intermediary under Section 2(13) of the IGST Act, 2017. The Authority concluded that the applicant's services fall under 'Intermediary Services' classifiable under HSN Code 9961/9962. 2. Export of Services: For the marketing services to be considered an export of services under Section 2(6) of the IGST Act, 2017, all conditions must be met, including the place of supply being outside India. The applicant argued that the services provided to GTRS, a company based in Sharjah, UAE, should be treated as an export of services. The Authority noted that since the applicant is classified as an intermediary, the place of supply for intermediary services is the location of the supplier, which is in India. Consequently, the condition that the place of supply should be outside India is not satisfied. Therefore, the marketing services provided by the applicant do not qualify as an export of services. Conclusion: The Authority ruled that the marketing services provided by the applicant constitute 'Intermediary Services' under HSN Code 9961/9962. Additionally, these services do not qualify as an export of services as defined under Section 2(6) of the IGST Act, 2017, because the place of supply is within India. Order: 1. The marketing services agreed to be provided by the applicant will constitute 'Intermediary Services' classifiable under HSN Code 9961/9962. 2. The marketing services provided by the applicant do not qualify as an export of services under Section 2(6) of the Integrated Goods and Services Tax Act, 2017.
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