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2019 (10) TMI 617 - AAR - GSTClassification of services - IT Support Services - IT Managed Services - N/N. 11/2017-Central Tax (Rate) dated 28th June 2017 - the entries that need to be examined are 99831, 99833, 99834 and 99839. The other entries which may need examination are 998598, 998729. HELD THAT - The Support services provided by the applicant have been examined and it is seen that the support services include the support of software products and also hardware products. Some of the plans include support of the entire infrastructure (especially Pro-active support services). Hence it is common contract for maintenance of hardware and software and hence is directly related to the Group related to information technology services and hence is covered under the Group 99831. Whether the support services fall under Service Code (Tariff) 998313 or 998316 or 998319? - HELD THAT - It is seen that applicant is providing support of both hardware and software and the issue boils down to whether they are covered under Information Technology Consulting and Support Services (Service Code 998313) or Information Technology Infrastructure and Network Management Services (Service Code 998316). The operations of the applicant are analysed with reference to the above and found that the support services mentioned above are all related to such services which are not directly involved in the provision of the service or supply of goods by the recipient, and hence only assists the recipient of services by providing advice, trouble shooting of hardware and software, to recover the damaged portion and the like - The Managed Services provided by the applicant have also been examined and found that they are related to the management of Data Centres, Storage infrastructures, Networks and Communication infrastructures and hence are directly related to the Group related to information technology services and hence is covered under the Group 99831. The managed services offered by the applicant is verified and found that they are involved in the management of IT infrastructure including networks and hence these services squarely fall under the Service Code 998316.
Issues Involved:
1. Classification of IT Support Services under the correct Service Accounting Code (SAC). 2. Classification of IT Managed Services under the correct Service Accounting Code (SAC). Detailed Analysis: 1. Classification of IT Support Services under the correct Service Accounting Code (SAC): The applicant, a Private Limited Company registered under the Goods and Services Act, 2017, sought an advance ruling to determine the correct SAC for IT Support Services. The applicant is a subsidiary of Dimension Data Asia Pacific Pte Ltd, based in Singapore, and operates from an SEZ in Bangalore. The services provided qualify as 'zero-rated supply' under section 16 of the IGST Act, 2017. The applicant's IT Support Services are sub-classified into Uptime Support Services and Pro-active Support Services. Uptime Support Services include Remote Support, Part-only support, On-Site support, and Mission Critical Support. Pro-active Support Services involve Asset Tracking & Analytics Support Services, Proactive Problem Support Services, and IT Service Integration. The applicant proposed that these services fall under SAC 998313, which pertains to Information Technology Consulting and Support Services. The applicant argued that technical services should be classified under the specific entry for information technology services rather than a general entry. They cited the principle that a specific entry prevails over a general entry, referencing judgments from the Hon'ble Supreme Court of India. Upon examination, the Authority noted that the support services provided include support for both hardware and software. The services are technical in nature, involving troubleshooting, maintenance, and support without direct involvement in the recipient's production activities. Therefore, these services fall under SAC 998313, which includes IT technical support services such as customer support, troubleshooting, and repair of IT equipment. 2. Classification of IT Managed Services under the correct Service Accounting Code (SAC): The applicant also sought to classify IT Managed Services, which include management of Data Centres, Storage infrastructures, Networks, and Communication infrastructures. These services are customized based on the customer's requirements. The applicant proposed that these services fall under SAC 998316, which pertains to Information Technology Infrastructure and Network Management Services. The Authority examined the nature of these services and found that they involve managing and monitoring IT infrastructure, including hardware, software, and networks, as well as communication networks. The Authority confirmed that the managed services provided by the applicant, which involve the management of IT infrastructure and networks, fall under SAC 998316. This classification includes services related to managing and monitoring a client's IT infrastructure and communication networks. Ruling: 1. The IT Support services provided by the applicant are covered under the Service Code 998313. 2. The IT Managed services provided by the applicant are covered under the Service Code 998316.
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