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2021 (4) TMI 559 - AAR - GSTScope of Advance Ruling - Classification of supply - export of services - zero rated supply or not - Commission paid to foreign agent who is non resident of India and he does not have any permanent establishment or business connection in India - liability of GST on such commission payable to foreign agent related to service provided out of India. HELD THAT - Both the questions raised by the applicant do not fall within any of the clauses of (a) to (g) of Sub-section(2) of Section 97 of the said Act, i.e. they do not fall within the ambit of Section 97(2) of the said Act as both the questions are related to export of service which would also require the determination of place of supply of services which is not under the scope of jurisdiction of the Advance Ruling Authorities.
Issues Involved:
1. Whether the service provided to a recipient in a foreign country will be considered as export and zero-rated supply. 2. Liability of GST on commission payable to a foreign agent who is non-resident of India and does not have any permanent establishment or business connection in India. Detailed Analysis: Issue 1: Export of Services and Zero-Rated Supply The applicant, M/s. Unlimited Unnati Pvt. Ltd., offers a training program called 'Exploring Potential & Achieving Dreams' (ePaD) via digital means like Zoom to clients outside India. They receive payment in foreign convertible exchange and collect full course fees at registration. They sought clarification on whether this service qualifies as an export of services and thus a zero-rated supply. Discussion and Findings: The applicant provided their interpretation of GST laws, referencing Section 2(6) of the IGST Act, 2017, which defines "export of services" and includes criteria such as the supplier being in India, the recipient being outside India, the place of supply being outside India, and payment being received in foreign convertible exchange. However, the Authority noted that the applicant did not submit copies of agreements/contracts related to these services, which are necessary to determine the nature of services and GST liability. Moreover, the Authority emphasized that determining the place of supply, which is crucial for deciding export status, is beyond their jurisdiction as per Section 97(2) of the CGST Act, 2017. Conclusion: The Authority refrained from providing an answer, stating that the question falls outside the ambit of Section 97(2) of the CGST Act, 2017, and due to the non-submission of relevant contracts/agreements. Issue 2: GST Liability on Commission to Foreign Agent The applicant plans to appoint a foreign agent for marketing their services, who will receive a commission based on a fixed percentage. They sought clarification on GST liability for the commission paid to this foreign agent. Discussion and Findings: Similar to the first issue, the applicant did not provide copies of the agreements/contracts with the foreign agent. The Authority reiterated that without these documents, they could not determine the GST liability. Additionally, determining the place of supply, which is necessary to ascertain GST applicability, is beyond their jurisdiction. Conclusion: The Authority refrained from providing an answer, citing that the question is outside the ambit of Section 97(2) of the CGST Act, 2017, and due to the non-submission of relevant contracts/agreements. Ruling: Question 1: No answer provided due to the question being outside the ambit of Section 97(2) of the CGST Act, 2017, and non-submission of relevant contracts/agreements. Question 2: No answer provided due to the question being outside the ambit of Section 97(2) of the CGST Act, 2017, and non-submission of relevant contracts/agreements.
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