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TMI Blog2018 (12) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act". 02 FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- STATEMENT OF THE RELEVANT FACTS HAVING A BEARING ON THE QUESTIONS: We are Crew Recruitment & Placement Agency operating from Belapur, Navi Mumbai having GST Regn No. 27AADCM6918M1ZZ. We have been into selecting & recruiting the shipping personnel on behalf of Foreign Ship Owner & have been charging Administration fees for the same & paying GST on the Administration charges so received. The Reserve Bank of India vide its "Circular no. 15 dated 24.09.2015" has allowed for opening of Foreign Currency Account by Ship Manning/ Crew Management Agencies. According to the circular the credit to such foreign currency account would be through normal banking channels from the overseas principal and the debits would be towards various local expenses in connection with the management of Ships/Crew in the ordinary course of business. (A copy of the said RBI Circular is attached herewith for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrency accounts would be only by way of freight or passage fare collections in India or in ward remittances through normal banking channels from the overseas principal. Debits will be toward Various local expenses in connection with the management of the ships / crew in the ordinary course of business. b) No credit facility (fund based or non-fund based) should be granted against security of funds held in such accounts. c) The bank should meet the prescribed 'reserve requirements' in respect of balances in such accounts. d) NO EEFC facility should be allowed in respect of the remittances received in these accounts. e) These foreign currency accounts will be maintained only during the validity period of the agreement. 3. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned. 4. The directions contained in this Circular have been issued under Section 10 (4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law. 03. CONTENTION - AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been separately indicated in the invoice issued by the pure agent to the recipient of service; and (iii) the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account. Explanation.- For the purposes of this rule, the expression "pure agent" means a person who- (a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both; (b) neither intends to hold nor holds any title to the goods or services or both so procured or supplied as pure agent of the recipient of supply; (c) does not use for his own interest such goods or services so procured; and (d) receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account. Comments: As per the details provided by the applicants and Rule 33 of the CGST Rule 2017, the salary should not be taxable under GST as the applicant is giving instruction to the bank and acting as Agent only on behalf of their Foreign principal. The applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that, the amount so remitted towards disbursal of salary would not be taxable under GST in view of provisions of Rule 33 of the CGST Rules, 2017. The applicant has submitted that as per Regulation 6 of Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2000 notified vide Notification No. FEMA 10/2000-RB dated May 3, 2000, as amended from time to time, and A.P. (DIR Series) Circular No. 48 dated April 30, 2007, general permission is available to ship- manning/crew managing agencies that are rendering services to shipping/ airline companies incorporated outside India, to open, hold and maintain non-interest bearing foreign currency account with an AD Category - I bank in India for meeting the local expenses in India of such shipping or airline company. The question raised by the applicant is connected with their agreement that they have entered into with M/s. Reefership Marine Services Limited (RMS), situated in Bermuda, i.e. outside India. The agreement made on the 01.11.2003 between the applicant and RMS, has been submitted by the applicant and by way of which the applicant would assist RMS to hire officers of Indian Nationality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch recipient; (ii) the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and (iii) the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account. Explanation.- For the purposes of this rule, the expression "pure agent" means a person who- (a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both; (b) neither intends to hold nor holds any title to the goods or services or both so procured or supplied as pure agent of the recipient of supply; (c) does not use for his own interest such goods or services so procured; and (d) receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account. From the above provisions of Rule 33 and the facts of the proposed transaction explained by the applicant, we find that the applicant will be acting as a pure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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