Export of Services or Domestic supply of services, Goods and Services Tax - GST

[Pradeep Singhi]

A pathology lab is providing services of diagnosis by collecting blood samples from a hospital located at a place outside India. After diagnosis, Test report is sent to recipient (Hospital) via Email.

1. Whether above supply can be treated as Export of Services?

Posts / Replies

[Amit Agrawal]

In my humble view, place of supply will be "foreign country" (i.e. where recipient-hospital is located outside India) despite the fact that said pathology lab is presumably located in India, testing on blood samples is actually carried on in said lab in India & such blood samples are either gets lost during the testing process or destroyed there-after but never get re-exported out of India and despite the wordings of Section 13(3)(a) of the IGST Act, 2017.

And if others conditions are also satisfied as per Section 2(6) of the IGST Act, 2017 (i.e. in addition to the requirement that 'the place of supply of service is outside India'), provision of subject services will amount to export of services under GST.

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

[KASTURI SETHI]

Dear Querist,

It is also worthwhile to peruse the decision of AAR Kerala:-

2019 (5) TMI 900 - AUTHORITY FOR ADVANCE RULINGS, KERALA - IN RE : MEDIVISION SCAN AND DIAGNOSTIC RESEARCH CENTRE (P) LTD.

[Sadanand Bulbule]

Dear querist

I endorse the valid explanation of both the Ld. experts.

[Amit Agrawal]

In continuation of my last post:

A. Query raised was 'Whether above supply can be treated as Export of Services?' which I tried to answer in my earlier post;

B. In the context of the query raised and case-law quoted at Serial No. 2 above, one must note Section 16 (2) of the IGST Act, 2017 and same reads as follows: Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply.

C. While subject services are exempted from GST, the tax-payer can indeed claim ITC (subject to Section 15(c)) against input, capital goods and input services used by him in his business if he can prove that his output services (even though exempted from GST) are exported outside India.

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

[Amit Agrawal]

*In my last post, In Para 3, please read as follows: .......(subject to Section 17(5)).......

[Finacus Technologies]

Delivering services to clients or customers who are not in the country of origin is referred to as "export of services." However, "domestic supply of services" refers to providing services inside the boundaries of the nation in which the service provider is headquartered.