Type of GST payable, Goods and Services Tax - GST

[Kaustubh Karandikar]

As per the decision of the Mumbai High Court which states in its order on Page 113:-

“The provisions of Section 13(8)(b) and Section 8(2) of the IGST Act are legal, valid and constitutional, provided that the provisions of Section 13(8)(b) and Section 8(2) are confined in their operation to the provisions of IGST Act only and the same cannot be made applicable for levy of tax on services under the CGST and MGST Acts”. As per the provision of IGST Act, the GST payable is to be paid under IGST as per my understanding. Does the order confirm that the GST payable by the intermediary located in India for supplies made to its customer outside India is to be paid under ‘IGST’ or does it confirm that the GST payable is under ‘CGST+SGST’? Need valuable guidance in the matter

Posts / Replies

[Amit Agrawal]

As readers at TMI are well aware, through my article published & views shared under discussion forum, it is my constant view that no GST is payable by services provided by an intermediary, located in India to the recipient located located outside India.

I hold this view because I feel that despite Section 13 (8) (b) & Section 7 (5) of the IGST Act, 2017, above-said services do not fall either under inter-state supply or intra-state supply.

One may refer to my article published on TMI on following link:

https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=8346

And my views shared multiple views are this discussion forum. For example: Post ar serial No. 9 under Issue-ID: 116950 bearing subject-line as follows: GST on intermediary service

And my reading & interpretation of judgement given by third member G. S. KULKARNI, J., as reported in 2023 (4) TMI 821 - BOMBAY HIGH COURT (i.e. conclusion highlighted in your query) says that 'no GST is payable in subject situation, despite holding that Section 13 (8) (b) of the IGST Act, 2017 is legal, valid and constitutional'.

Needless to say & I am well aware that dispute / issues involved are very complex in nature that it will be ultimately settled only by Supreme Court .... sooner or later.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Shilpi Jain]

Going by section 13(8) - CGST SGST it would be. However, per the HC decision - it is held unconstitutional.

[Padmanathan Kollengode]

I agree with views of expert. No GST is payable in this scenario but the matter will definitely go to Supreme Court.

[Amit Agrawal]

Three judges of Bombay HC have given three different reasonings & thereby, rulings for GST implications against services provided by an intermediary, located in India to the recipient located located outside India.

They have very different interpretations about constitutional validity, Section 7 (5) & 13 (8) (b) of the IGST Act, 2017 & so on, among them.

Only common conclusion - it seems - is that, all 3 of them ruled that, CGST & SGST is not payable against such services (although for 3 different reasonings).

Interesting time ahead ---- at Apex Court.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

Still, it felt nice when 2 of 3 judges 'effectively' ruled that neither CGST & SGST nor IGST is payable on services provided by an intermediary, located in India to the recipient located located outside India (which is my long held consistent view).

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Kaustubh Karandikar]

Thanks Amit ji, Shilpi ji and Padmanathan ji for your detailed views which has helped me to add to my knowledge. However, the GST authorities might intepret the same strictly as per the provisions of 13(8)(b) and going by that, if the supplier is situated in India, they might raise a demand.

[Amit Agrawal]

Before raising demand, Dept. officers need to first decide "type of GST payable" (i.e. CGST & SGST or IGST) in their views. Don't they?

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Kaustubh Karandikar]

Yes Amit ji, fully agree with you going by the ruling. But they might levy CGST + SGST since the place of supply is India.

[Amit Agrawal]

Such demand, if raised now (i.e. before Apex Court decides the issue favouring Dept's such interpretation), can be directly challenged in jurisdictional High court, specially when service provided is located in State of Maharashtra.

As explained in my earlier posts, only common conclusion among all three judges of Bombay High Court is that, CGST & SGST is not payable against such services (even if for 3 different reasonings).

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

Please read, in first Para of my post above, as follows:

* .................. specially when such service provider is located in State of Maharashtra

[Kaustubh Karandikar]

Yes sir, we can certainly take shelter of this ruling and contest. Thanks for your guidance and advice.

[Shilpi Jain]

Consider paying this tax under protest and then applying for a refund