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2024 (5) TMI 658 - HC - GSTNon-payment of GST - Place of supply - non-taxable territory - Tax imposed on exhibition services received by the petitioner in non-taxable territory from the person located in non-taxable territory on RCM basis - interest and penalty - HELD THAT - As per sub-section(3) of Section 5 of IGST Act, the Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. A notification dated 28.06.2017 has been issued in exercise of powers conferred under sub-section (3) of Section 5 of IGST Act, which is not under challenge. Sub-section (5) of Section 13 of the IGST Act, includes the places of supply of services. In the present case, the supply of services has taken place outside India and as per the notification the receiver of service is the person who is registered in the taxable territory. Petitioner is a registered person who is located in the taxable territory. There are no reason to entertain the writ petition as the services received outside India is already taxable at the hand of the receiver of services, who is a registered person in taxable territory i.e. India. The writ petition being devoid of merits is dismissed.
Issues: Jurisdiction of tax imposition on services received outside India under the IGST Act
Issue 1: Whether services received outside India can be taxed in India under the IGST Act? The petitioner sought relief to quash the tax imposed on exhibition services received in a non-taxable territory from a person located outside India on a reverse charge mechanism basis. The petitioner argued that as per Section 1 of the IGST Act, services received outside India cannot be taxed in India. The petitioner participated in an exhibition outside India and contended that such services should not be taxed under the IGST Act in India. Issue 2: Interpretation of relevant provisions of the IGST Act The counsel for the petitioner highlighted Section 13 of the IGST Act, which addresses services received outside India. The petitioner's argument was that the provisions of the Act extend to the whole of India, and therefore, services received outside India should not be subject to IGST in India. However, the authorities contended that Section 13 of the IGST Act includes fairs and exhibitions as services received outside India, making the petitioner liable to pay IGST. Issue 3: Validity of government notification under the IGST Act A notification issued by the Government of India under Section 5(3) of the IGST Act specified categories of supply of services on which tax shall be paid on a reverse charge basis by the recipient. The authorities argued that the petitioner, being a registered person in the taxable territory, is liable to pay IGST on services received outside India as per the notification. They further contended that the petitioner had an alternative remedy of appeal instead of challenging the notification through a writ petition. Judgment: The High Court examined the contentions and relevant provisions, including Section 13 of the IGST Act and the government notification specifying tax payment on reverse charge basis. The Court noted that the services received outside India are already taxable at the hands of the receiver of services, who is a registered person in the taxable territory of India. Therefore, the writ petition was dismissed as devoid of merits, and the stay application was also disposed of accordingly.
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