2022 (6) TMI 1256 - AAAR - GST

Supply or not - mixed supply or not - Liaison activities between India office and Dubai office - host of activities undertaken by the Appellant at the behest of their Dubai Head Office - intermediary Service or otherwise - the activities undertaken by the Appellant can be construed as Supply as envisaged under Section 7 of the CGST Act, 2017 or not - place of Supply of the impugned activities is within taxable territory or not - Requirement to obtain registration - HELD THAT - On perusal of the activities undertaken by the Appellant, it is noticed that the Appellant are undertaking a bunch of activities - On close scrutiny of the activities undertaken by the Appellant, it is noticed that all these activities may be construed as an individual independent supply in itself, if undertaken by the Appellant separately. Further, it is observed that the Appellant are charging, from their Dubai Head Office, a single price or consolidated amount, i.e., reimbursement of the monthly expenses on cost- to- cost basis. Thus, it can be concluded that the bunch of activities undertaken by the Appellant is nothing but the mixed supply as provided under Section 2(74) of the CGST Act, 2017. On perusal of the activities of the Appellant, it is conspicuous that the Appellant, inter-alia, are organizing various seminars, conferences, other interactive events for Indian Business entities and Dubai Business entities/ delegates for the better understanding of the business landscapes in India and Dubai, and for promoting and projecting Dubai as an international business hub as a part of the diplomatic mission of their Dubai Head Office. Thus, such activities of the Appellant can be grouped under the category of support services having the Service Accounting Code 998596 which has the description as Events, exhibitions, conventions and trade shows organization and assistance services - it is opined that the Appellant are providing support services to their Dubai Head Office, which attracts GST at the rate of 18% in terms of item (iii) of the entry at SI.No. 23 of the Notification No. 11/2017-C.T.(Rate) dated 28.06.2017, having the description Support services other than (i) and (ii) above . Whether the said activities undertaken by the Appellant can be construed as Supply as envisaged under Section 7 of the CGST Act, 2017? - HELD THAT - It is concluded that the host of activities carried out by the Appellant will come under the ambit of Supply as provided under Section 7 of the CGST Act, 2017, which, inter-alia, covers all forms of supply of goods or services or both made or agreed to be made for a consideration by a person in the course or furtherance of business. Whether the place of Supply of the impugned activities is within taxable territory, or otherwise? - Section 13 of the IGST Act, 2017 - HELD THAT - Since, the Appellant are, inter-alia, undertaking numerous activities pertaining to the organization of the various events in the nature of seminars, conference, round table discussions, etc., the place of supply in such cases will be the place where such events have been held. As it is evident that the Appellant are organizing such events in India, the place of supply of such services, provided by the Appellant, will be in India, i.e., in the taxable territory. Requirement to obtain registration - HELD THAT - The Appellant are required to obtain GST registration, and pay IGST on the entire amount received from their Dubai Head Office for providing the said mixed supply of support services. On plain reading of the definition of consideration , it is apparent that the a very wide connotation has been given to the term consideration by the legislature which is evident by the presence of the expressions any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person , having a very wide expansion, which would clearly include even the payment, which are in the nature of reimbursement of the expenses. Thus, the cost -to -cost reimbursement, received by the Appellant from their Head Office in respect of the supply of services, will be construed as consideration . Whether the Appellant, i.e., DCCI-L.O. and its Dubai Head Office, i.e., DCCI-H.O. are one and the same person, or otherwise as per the GST law? - HELD THAT - On perusal of the definition of the term person , it is seen that anybody corporate incorporated by or under the laws of a country outside India is a person. This means that as per the CGST Act, 2017, DCCI-H.O. is a person as it has been incorporated under the laws of a country outside India. Further, from the same definition of person , reproduced above, it is also manifest that every artificial juridical person, not falling within any of the above is also a person. This leads us to conclude that DCCI-L.O., i.e., the Appellant, who is also bound to comply with various statutory obligations in India, viz. filing of Annual Income Tax Returns with the Income Tax Authorities, filing of Annual Financial Statements with the Registrar of the Companies under the Indian Companies laws, etc., can definitely be considered as an artificial juridical person. Thus, it is seen that DCCI-H.O. and DCCI-L.O./Appellant are two different persons as per the GST law, and thereby, the activities undertaken by the Appellant at the behest of their Dubai Head Office will clearly constitute supply in terms of Section 7(1)(a) of the CGST Act. 2017 as all the prerequisites of the supply provided under Section 7(1)(a) of the CGST Act, 2017 are being satisfied by the activities undertaken by the Appellant at the behest of their Dubai Head Office. Thus, the host of activities performed by the Appellant at the behest of their Dubai Head Office will come under the ambit of Supply in terms of Section 7(1 )(a) of the CGST Act, 2017, and are required to take GST registration, and discharge their IGST liability, if any, on the amount received from their Dubai Head Office - Appeal filed by the Appellant is not maintainable, and hence hereby, dismissed.

Summary

Issues Involved:
1. Whether the activities undertaken by the Appellant can be construed as those of an "intermediary."
2. Whether the activities undertaken by the Appellant can be construed as "Supply" under Section 7 of the CGST Act, 2017.
3. Whether the place of supply of the impugned activities is within the taxable territory.

Detailed Analysis:

1. Intermediary Status:
The definition of "intermediary" under Section 2(13) of the IGST Act, 2017 includes a broker, agent, or any person who arranges or facilitates the supply of goods or services between two or more persons but does not include a person who supplies such goods or services on his own account. The Appellant was found to act as a link between businesses in India and Dubai by sharing details and making introductions but not arranging or facilitating the actual supply of goods or services. Therefore, the Appellant was not considered an "intermediary."

2. Supply Under CGST Act:
The activities of the Appellant were considered "services" under Section 2(102) of the CGST Act, 2017. The Appellant undertook various activities such as making introductions, organizing events, and sharing information, which were grouped under "support services" with Service Accounting Codes 998596 and 998599. These activities were deemed "mixed supply" as per Section 2(74) of the CGST Act, 2017, attracting GST at the rate of 18%. The Appellant's activities were considered "Supply" under Section 7(1)(a) of the CGST Act, 2017, as they were made for consideration in the course of business.

3. Place of Supply:
For event-based services, the place of supply is where the event is held, which in this case is India, making it a taxable territory. For other support services, the place of supply is determined by the location of the recipient, which is outside India, making it a non-taxable territory. The Appellant was found to be providing mixed supply, with the predominant supply being event-based support services, thus making the entire supply taxable at 18%.

Conclusion:
The Appellant is required to obtain GST registration and pay IGST on the entire amount received from their Dubai Head Office. The activities performed by the Appellant were held to be within the ambit of "Supply" under Section 7(1)(a) of the CGST Act, 2017, and the Appellant's appeal was dismissed.