9911796707
TMI Blog2019 (1) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... lationship between the parties is that of independent contractors meaning that the agreement does not intend to create relationship of principal and agent. The applicant shall not represent itself to be agent of party A and vice-versa. Further applicant have no authority to conclude or negotiate any contracts or secure any orders or maintain any stock of goods on behalf of Party A in this case. On the contrary applicant would provide service on own account to party A to improve functioning of holding company and further augment its business vis a vis sale of all products manufactured and or sold or to be manufactured and or sold in India territory. Thus we find that applicant is not a person who arranges or facilitate supply of services between two or more persons - Thus applying the test mentioned in the Education Guide to the facts of the case we can safely conclude that the proposed service would not fall to be classified as ‘intermediary service’. Under the GST Act, a composite supply would mean a supply consisting of two or more taxable supplies of goods or services or both or any combination thereof which are naturally bundled and supplied in conjunction with each other in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agreement dated 1 December 2012 constitute a supply of “Support services” falling under HSN code 9985 or “Intermediary service” classifiable under HSN code 9961 / 9962? - Held that:- The concept of intermediary under the GST Act is substantially identical to the concept of intermediary under the erst while service tax regime. This concept has been explained in the Education Guide issued by CBEC in the year 2012 - We find from the scrutiny of Marketing Services Agreement that the relationship between the parties is that of independent contractors meaning that the agreement does not intend to create relationship of principal and agent. The applicant in no way carries out activities such as conclusion of contracts, acceptance of sales orders, invoicing, determination of sales prices, rebate, discounts, resolution of customers complaints, or settlement of disputes with customers - thus,the proposed service would not fall to be classified as ‘intermediary service’. Whether the services supplied by the applicant constitute supply of ‘support services’? - Held that:- Applying the test as per Education Guide to the facts of the present case, we find that bouquet of services proposed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ER) PROCEEDINGS (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by Asahi Kasei India Private Limited, the applicant, seeking an advance ruling in respect of the following ISSUE. . 1. Whether the service supplied by the Applicant under the Service Agreement dated 1 March 2013 constitute a supply of Support services falling under HSN code 9985 Intermediary service classifiable under HSN code 9961/9962? 2. Whether the service supplied by the Applicant under the Marketing Services Agreement dated 1 December 2012 constitute a supply of Support services falling under HSN code 9985 or Intermediary service classifiable under HSN code 9961 / 9962? 3. Whether the services provided by the Applicant is an export of services as defined under Section 2(6) of the Integrated Goods and Services Tax Act 2017? At the outset, we would like to make it clear that the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioprocess Inc. [dated 15 April 20131; (modified 2nd February 2015 and name changed to Asahi Kasei Bioprocess America, Inc, USA) c. Agreement with Fabricated Products Division (Asaclean) of Asahi Kasei Chemicals Corporation [dated 01 October 2013] as amended vide agreement dated 01 July 2016: (modified 5th January 2017 and taken over by Asahi Kasei Corporation, Japan) d. Agreement with Asahi Kasei Plastics North America Inc. [dated 02 January 2014]; e. Agreement with Asahi Kasei Home Products Corporation [dated 01 April 2015]; f. Agreement with Bemberg Division of Asahi Kasei Fibers Corporation (dated 01 May 2015]; (modified 5th January 2017 and taken over by Asahi Kasei Corporation, Japan) STATEMENT CONTAINING APPLICANTS INTERPRETATION OF LAW IN RESPECT OF THE QUESTIONS RAISED Question on which advance ruling is required Whether the service supplied by the Applicant under the Service Agreement dated 1 March 2013 constitute a supply of Support services falling under HSN code 9985 Intermediary service classifiable under HSN code 9961 /9962? Statement of facts having a bearing on the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... represent itself to be the agent of the Other nor Shall either party accept service of legal process or create or assume any obligation of any kind or nature whatsoever on behalf of the other party. Neither shall have the authority to conclude or negotiate any contracts or secure any orders or maintain any stock of goods / merchandise, on behalf of each other. As a matter of fact, the Applicant has never negotiated or entered into any contract with any customer on behalf Of the Asahi Japan for supply of any goods or services. Asahi Japan has appointed some agents depending on products for negotiating with the customers and obtaining indent/orders. In all the cases, the contract is entered either by local agent or by Asahi Japan or other overseas group company directly. In fulfilment of its obligation, the Applicant has undertaken following activities: (i) Providing reports on the condition of the economy and undertaking market survey (ii) Visit to existing and perspective customers to understand their requirement, their business plan and their feedback and reporting to Asahi Japan (iii) Providing information on the products of Asahi Japan to the existi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Ramamurthi, Gelli Krishnamurthy Co. Vs. J. Ramanujan and Ors. (ALR 1961 AP 408) = 1960 (7) TMI 66 - ANDHRA PRADESH HIGH COURT ]. ii. K J Aiyar s Judicial Dictionary: - Word meaning an agent but used generally in a more special sense for one Who buys or sells on behalf of another. He must act according to the instructions given to him and as a general rule, his task is finished when he has made a contract between a buyer and the seller... Brokers are remunerated by commission known as brocage or brokerage... Types of brokers are: stock brokers, bill brokers, wool brokers, produce brokers and insurance brokers. The word is also applied to a dealer in second hand furniture or to one who values goods when they are seized for debt. The pawnbroker is a principal rather than an agent ( A Shetty and Sons Vs. State of Mysore (1961 (12) STC 731) = 1959 (9) TMI 46 - MYSORE HIGH COURT and CST vs. Vijay Kumar (1968 (21) STC 37 (All.) = 1967 (1) TMI 69 - ALLAHABAD HIGH COURT ]; iii. Concise Law Dictionary (2008 Edition): - A middlemen or an agent who for a commission on the value of the transaction, negotiates for others the purchase or sale of stocks, bonds, com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Delhi High Court decision in the case of Areva T D India Ltd. Vs. DCIT [2012-TIOL-234-HC-DEL-IT) = 2012 (4) TMI 79 - DELHI HIGH COURT wherein the Hon ble High Court applied the principle of ejusdem generis to interpret the expression business or commercial rights of similar nature referred to in section 32(1)(ii) of the Act and held that the Legislature did not intend to provide for depreciation only in respect of specified intangible assets but also to other categories of intangible assets, which were neither feasible nor possible to exhaustively enumerate. The principle of ejusdem generis was also upheld by the Apex Court in the case of Assistant Collector of C.Ex. Vs. Ramdev Tobacco Company (1991 (51) ELT 631 (SC)] = 1991 (1) TMI 136 - SUPREME COURT OF INDIA and CCE Vs. Shital International [MANU/SC/0884/2010) = 2010 (10) TMI 19 - SUPREME COURT OF INDIA . Similar view has been affirmed in the following cases: i. CIT vs. Rani Tara Devi [2013 (355) ITR 457 = 2013 (3) TMI 53 - PUNJAB HARYANA HIGH COURT ii. Commissioner of Income tax, Udaipur Vs. Mcdowell Co. Ltd. [MANU/SC/0964/2009] = 2009 (5) TMI 28 - SUPREME COURT 9. In v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans. 13. In this regard, we refer to the Hon ble CESTAT decision in the case of Amarnath Associates Vs. Commissioner of Central Excise [2017-TIOL-2489-CESTAT-DEL] = 2017 (7) TMI 95 - CESTAT NEW DELHI wherein it was held that the definition of a commission agent requires an entity to act on behalf of another person and cause sale or purchase of goods or provision or receipt of services, for a consideration. 14. It would also be apt to refer to the definition of the term Independent contractor which has been defined in the Concise Law Dictionary as follows: One who, exercising an independent employment, contracts to do a piece of work according to his own methods, and without being subject to his employer s control, except as to the result of the work. An independent contractor is one Who undertakes to produce a given result but so that in the execution of the work he is not under the order or control of the person for whom he does it, and may use his own discretion in things not specified beforehand. 15. As highlighted above, the Services Agreement specifically provides a clause that the Parties do not intend to create any principal-age ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of an intermediary s service is invariably identifiable from the main supply of service that he is arranging. It can be based on an agreed percentage of the sale or purchase price. Generally, the amount charged by an agent from his principal is referred to as commission . Identity and title: The service provided by the intermediary on behalf of the principal is clearly identifiable. In accordance with the above guiding principles, services provided by the following persons will qualify as intermediary services : i) Travel Agent (any mode of travel) ii) Tour Operator iii) Commission agent for a service [an agent for buying or selling of goods is excluded] iv) Recovery Agent Even in other cases, wherever a provider of any service acts as an intermediary for another person, as identified by the guiding principles outlined above, this rule will apply. Normally, it is expected that the intermediary or agent would have documentary evidence authorizing him to act on behalf of the provider of the main service! 19. Para 5.9.6 of the Education Guide, 2012 issued by the CBEC clarifies the scope of the term intermed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplying the above to the present case, while the scope of services provided to the Asahi Kasei group is very wide, the same would fall within the ambit of the term composite supply with the marketing services being the principal supply 22. In view of the above, it is amply clear that the services provided by the Applicant cannot be considered as an Intermediary services . However, in order to determine the correct classification of the services provided by the Applicant, it would be imperative to refer to the scope of the term Support services . 23. In the absence of any statutory definition of the term Support services under the CGST Act, IGST Act or rules made thereunder, reference is hereby made to the corresponding definitions under the Finance Act 1994. The relevant definitions under the pre-negative list era (Section 65(104c)) and Negative list regime (Section 65B(49) are reproduced hereunder Section 65(1040) support services of business or commerce means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing processing of purchase orders and fulfilment services, information and tracking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormation on Indian market trends and features so as to assist in determining the nature and scope of the Indian market potential; b) Assisting the service recipient in the adaptation and implementation of its advertising policy; c) Assisting the service recipient in conducting sales prospection through participation in industry events such as scientific gatherings, exhibitions, trade shows and the like; d) Liaising with Customers and potential Customers and to collect their product development plans and strategy and road-maps , as well as their product specifications; and reporting the same to the service recipient the information obtained through such interactions; e) Providing any feedback to the service recipient that would help improve the service recipient s marketing; Facilitating the service recipient in arrangement of discussions and provision of interpretation services and cross culture advice; or the sake of clarity, neither AKI (i.e. the Applicant) nor any of its representatives shall have any authority to conduct negotiations on behalf of the service recipient; f) Connecting Customers with representatives of the service recipient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; 2. Each of these conditions have been discussed in detail hereunder: a. Condition 1 - Supplier of service is located in India For this, we refer to the definition of the term location of the supplier of services as defined under section 2(15) of the IGST Act. As per the said definition, where a supply has been made from a place where the person has obtained registration, the location of the supplier shall be such place of business. In the instant case, the Applicant is providing service from Maharashtra for which it has obtained GST registration. Consequently, the location of the supplier of service shall be Maharashtra i.e. in India. b. Condition II - Recipient of service is located outside India The term location of the recipient of services has been defined under section 2(14) of the IGST Act. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the conditions for treating the supply of services as an export of services in terms of Section (6) of the IGST Act. Therefore, the answer to Question No. 3 above should be in affirmative. 03. CONTENTION - AS PER THE CONCERNED OFFICER The submission, as reproduced verbatim, could be seen thus- M/s. Asahi Kasei India Pvt. Ltd., The Capital Office No. 1502-B, 15th Floor, Plot No. C-70, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai 400051 (here in after referred to as the Applicant ) has filed above detailed application under Section 98 of the Central Goods and Service Tax Act, 2017 read with Rule 104 (1) of the CGST Rules, 2017 seeking advance ruling on: 1) Whether the service supplied by the Applicant under the Service Agreement dated 1 March 2013 constitute a supply of Support services falling under HSN code 9985 or Intermediary service classifiable under HSN code 9961/9962? 2) Whether the service supplied by the Applicant under the Marketing Services Agreement dated I December 2012 constitute a supply of Support services falling under HSN code 9985 or Intermediary service classifiable under HSN code 9961/9962? 3) Whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Territory and report the results thereof to Party A. 8. Party B shall perform services, as directed by Party A, resulting from the assignments pursuant to paragraph 4 through 7 of this Agreement, including, but not limited to, those services with regard to finance, accounting, and patent and legal matters. As per Clause 9 of the Agreement, Service consideration received by the Applicant is the direct cost+ apportioned overhead expenses+10% margin +applicable taxes. From perusal of the above extract of the agreement it is seen that the Applicant is engaged in the activities for the party A, viz. research on the matters such as corporate accounting, corporate finance, corporate personnel and labour relations, corporate research and development, quality assurance and corporate intellectual property, provide with economic, industrial and technical information on the products falling under the category of the Products and their markets, trends and outlook together with similar information concerning such other industries in the Territory, when representatives of Party A visit the Territory and Party A so requests, Party B shall provide necessary assistance in liaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ei Medical Co. Ltd., a Japanese Company. However, the address mentioned in the agreement is The Capital, Office No. 801-C, 8th floor, Plot No.C70, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai-400051, which is different from Advance Ruling Application of the applicant. The scope of the services provided by the Applicant under Marketing Services Agreement with Bioprocess Division of Asahi Kasei Medical Co. Ltd., are highlighted at Article 2 of the Agreement. The relevant extract of the agreement is reproduced hereunder: Bioprocess Division of Asahi Kasei Medical Co. Ltd. referred to as AM in agreement dated 01 December 2012. The services shall comprise the following activities, all of which are described with respect to the Products in the Territory, and all only to be conducted at and under the explicit direction of AM. a) Conducting market surveys and providing the AM with information on Indian market trends and features so as to assist in determining the nature and scope of the Indian market potential; b) Assisting AM in the adaptation and implementation of AM s advertising policy, c) Assisting AM in conducting sales prospection through participation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and potential customers and to collect their product development plans and strategy and road-maps , as weII as their product specifications, and reporting to AM information obtained through interactions, providing any feedback to AM that would help improve AM s marketing; Facilitating AM in arrangement of discussions and provision of interpretation services and cross culture advice; for the sake of clarity, neither AKI (i.e. the Applicant) nor any of its representatives shall have any authority to conduct negotiations on behalf of AM, connecting Customers with AM representatives for the purpose of obtaining orders and establishing and maintaining close commercial relationships between AM and customers, providing staff of AM or its customers visiting the territory with such assistance as may be reasonably requested by AM, including but not limited to providing information, guide, escort and interpreting services during Customers visits; for the sake of clarity, the premises of AKI(applicant) will not be the premises of AM and the same shall not be made available to employees or other personnel of AM who may visit India, providing information on products and its functioning or sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading No.998399; vi) Connecting Customers with AM representatives for the purpose of obtaining orders and establishing and maintaining close commercial relationships between AM and customers, appears to fall under business support services under Heading No.99859; vii) Providing staff of AM or its customers visiting the territory with such assistance as may be reasonably requested by AM, including but not limited to providing information, guide, escort and interpreting services during Customers visits; for the sake of clarity, the premises of Akl (applicant) will not be the premises of AM and the same shall not be made available to employees or other personnel of AM who may visit India, There is a conditional clause, hence, Advance Ruling should not be given for this services. viii) Providing information on products and its functioning or similar such services to AM s customers and notifying AM of any Customer complaints. In this the service category is not clearly mentioned, hence, Advance Ruling should not be given for this services; ix) Monitoring regulatory developments (including, where possible, establishing and maintaining contact with regulatory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling the first condition with reference to term The recipient of service is located outside India as defined under Section 2(14) of the IGST Act. C. Condition-III place of supply of Service is outside India. The services provided by the Applicant is in nature of different services in the above two agreement viz, in Service agreement dated 1st March, 2013, the following services appears to be applicable: Market Research services under Heading No.998371; Legal documentation and certification services concerning patents, copyrights and other intellectual property rights services which fall under Heading No.998213 Original compilations of facts or information which fall under Heading No.998394i / Business Support Service under Heading No.99859. in Marketing Service agreement dated 1st December, 2012, the following services appears to be applicable : Market Research services under Heading No.998371. Advertising services under Heading No.998361, Events, exhibitions, conventions and trade shows organization and assistance services falling under Heading No.998596. Original compilations of facts or information which fall under Heading No.998394 / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice shall be the location where the services are actually performed. 5. Regarding Para 8 of the agreement, it is felt that Advance Ruling cannot be given because without proper and full facts. In this Para, conditions like but not limited to is mentioned, which does not give a clear picture of what services it pertains to. Hence, Advance Ruling or for Para 8 cannot be given. 6. Regarding Para 9 of the agreement, it is subject to separate treatment to any intermediary activities where place of provision of service is governed by Section 13(8) of the CGST Act, 2017. In Marketing Service agreement dated 01.12.2012, 7. Conducting market surveys and providing the AM with the information on Indian market trends and features so as to assist in determining the nature and scope of the Indian market potential appears to fall under Market Research services under Heading No.998371 and will be covered under Section 13(2) of the IGST Act, 2017 and place of supply of service or shall be the location of the recipient of services;, 8. Assisting AM in the adaptation and implementation of AM s advertising policy appears to fall under Advertising services under Heading No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would help improve AM s marketing; Facilitating AM in arrangement of discussions and provision of interpretation services and cross culture advice; for the sake of clarity, neither AKI (i.e. the Applicant) nor any of its representatives shall have any authority to conduct negotiations on behalf of AM, appears to fall under Other professional, technical and business services nowhere else classified under Heading No.998399, will be covered under Section 13(2) of the IGST Act, 2017 and place of supply of service or shall be the location of the recipient of services; 14. Providing staff of AM or its customers visiting the territory with such assistance as may be reasonably requested by AM, including but not limited to providing information, guide, escort and interpreting services during Customers visits; for the sake of clarity, the premises of AKI (applicant) will not be the premises of AM and the premises of AKI(applicant) in India shall not be made available to employees or other personnel of AM who may visit India, will be covered under Section 13(3)(b) interalia Section 13(4) of the IGST Act, 2017 and the place of supply of service shall be the location where the services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garwal, C.A. along with Sh. Sunil Kumar Bhambhari, Asstt. General Manager and Sh. Huzefa Chataiwala Manager Accounts appeared and requested for admission of application as per contentions in their ARA. Jurisdictional Officer, Sh. Anupam Kumar, Inspector, Division -IV appeared and made written submissions. The application was admitted and called for final hearing on 08.08.2018, Sh. Dinesh Kumar Agarwal, C.A. along with Sh. Sunil Kumar Bhambhari, Asstt. General Manager and Sh. Huzefa Chataiwala Manager Accounts appeared and made oral and written submissions. Jurisdictional Officer, Sh. Anupam Kumar, Inspector, Division -IV appeared and stated that they have aleady made written submissions. 05. OBSERVATIONS We have gone through the facts of the case. The issue put before us is in respect of a future transaction which would be on the lines thus - The Applicant provides sales promotion and marketing support to Asahi Kasei group. For this, the Applicant has entered in to a Services Agreement dated 01 March 2013 with Asahi Japan and Marketing Services Agreement with various group companies of Asahi Kasei group. The scope of work under the Agreement is broadly stated below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asoning and coordinating activities (including interpreting) to such representatives. 7. From time to time, as and when requested by Party A, Party B shall make market surveys of the Products in the Territory and report the results thereof to Party A. 8. Party B shall perform services, as directed by Party A, resulting from the assignments pursuant to paragraph 4 through 7 of this Agreement, including, but not limited to, those services with regard to finance, accounting, and patent and legal matters. We also add here that Agreement for Modification of Services Agreement dated 5 th January 2017 in no way alter the essence of services agreement date 1st March, 2013. Basis the terms of the contract aforesaid, we examine the claims made by the applicant, whether the provision of services constitute intermediary as defined under section 2(13) of the IGST Act. The said definition is reproduced here under: 2(13) intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional freight service (say, from Mumbai port to the international destination), under a single contract, on his own account (i.e, he buys-in and sells freight transport as a principal), and charges a consolidated amount to the exporter. This is a service of transportation of goods for which the place of supply is the destination of goods. Since the destination of goods is outside taxable territory, this service will not attract service tax. Here, it is presumed that ancillary freight services (i.e. services ancillary to transportation- loading, unloading, handling etc.) are bundled with the principal service owing to a single contract or a single price (consideration). On an import shipment with similar conditions, the place of supply will be in the taxable territory, and so service tax will be attracted. When he acts as an intermediary Where the freight forwarder acts as an intermediary, the place of provision will be his location. Service tax will be payable on the services provided by him. However, when he provides a service to an exporter of goods, the exporter can claim refund of service tax paid under notification for this purpose. Similarly, persons such as cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... afely conclude that the proposed service would not fall to be classified as intermediary service . As a corollary of this finding, we shall now move on to decide whether the services supplied by the applicant constitute composite supply and categories as support services ? Applicant has strongly relied on the definition of composite supply as defined under section 2(30) of the GST, the Education Guide-2012 and the decision of ARA in case of Godday India Web Services Pvt. Ltd. [2016 (46) 806 (AAR) = 2016 (3) TMI 355 - AUTHORITY FOR ADVANCE RULINGS to submits that the supply of services as evidenced by the Services Agreement constitute composite supply with the Marketing Services as principal supply. The expression Composite Supply has been defined under GST Act, as below - (80) composite supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply Under the GST Act, a composite supply would mean a supply consisting o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but indicative of bundling of services in ordinary course of business are - There is a single price or the customer pays the same amount, no matter how much of the package they Actually receive or use. The elements are normally advertised as a package. The different elements are not available separately. The different elements are integral to one overall supply - if one or more is removed, the nature of the supply would be affected. No straight jacket formula can be laid down to determine whether a service is naturally bundled in the ordinary course of business. Each case has to be individually examined in the backdrop of several factors some of which are outlined above. In the present case from the Services Agreement we find that applicant proposes to provide two different categories of services which are as below: A) Research on the functioning of the company : Services pertaining to research on the matters related to the functions of the holding company such as - corporate accounting, corporate finance, corporate personnel and labour relations, corporate research and development, quality assurance and corporate intellectual property, and provide Party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii), (iii), (iv) of category B above constitute composite supply among them as these services are clearly independent where the market survey gives bouquet of services its essential character. For the above inference we find support from the agreement itself as party A require two different kinds of services as is evident from the agreement as below: Whereas party A may from time to time desire or require related information concerning the functions of the holding company and information on the markets in the territory (as defined in paragraph 2 for all the products manufactured by the subsidiary. The next submission of the applicant is that the services provided under the Service Agreement Merit classification as support services falling under HSN code 9985 We have gone through the rate notification no. 11/2017-Central Tax (Rate) dated 28/06/2017 as amended along with Annexure: Scheme of classification of services. We reproduce below the entry as per classification of services to determine the most appropriate service tariff code: Sr.no. Chapter, section, heading or group Service code (tariff) Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpretation services 362 998396 Trademarks and franchises 363 998397 Sponsorship services and brand promotion services 364 998399 Other professional, technical and business services nowhere else classified Sr.no. Chapter, section, heading or group Service code (tariff) Service description 345 Group 99837 Market research and public opinion polling services 346 998371 Market research services 347 998372 Public opinion polling services Sr.no. Chapter, section, heading or group Service code (tariff) Service description 444 Group 99859 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces, including, but not limited to, those services with regard to finance, accounting, and patent and legal matters would fall under service code tariff 99837 with service description market research services. Question: - 2. Whether the service supplied by the Applicant under the Marketing Services Agreement dated 1 December 2012 constitute a supply of Support services falling under HSN code 9985 or Intermediary service classifiable under HSN code 9961 / 9962? Applicant entered into Marketing Service Agreement dated 1st December 2012 with Bioprocess Division of Asahi Kasei Medical Co. Japan (in short AM). As per the preamble the services are proposed to be provided with the sole intention to develop/ argument sales of bioprocess consumables and for that purpose AM desires to secure market support services offered by the Applicant. Applicant proposes to provide services which shall comprise of following activities. a) Conducting market surveys and providing the service recipient with the information on Indian market trends and features so as to assist in determining the nature and scope of the Indian market potential; b) Assisting the service recipient in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice activities as enumerated above shall be conducted at and under the explicit direction of AM in order to develop/ argument sales of Bioprocess consumable in the India territory. Applicant submits that as per the marketing service Agreement the relationship between the applicant and AM is that of independent contractors and not Intended to create between parties a relationship of principal and agent. By this agreement applicant shall not carry out any act that will be binding on AM, such as conclusion of contracts, acceptance of sales order, invoicing, determination of sales prices, rebates or discounts, resolution of customers complaints or settlement or disputes with the customers. On this factual matrix we discuss whether the provision of services constitute intermediary as defined under section 2(16) of IGST Act. The definition is already reproduced in preceding para of this ruling. The concept of intermediary under the GST Act is substantially identical to the concept of intermediary under the erst while service tax regime. This concept has been explained in the Education Guide issued by CBEC in the year 2012 which we have already reproduced in this ruling. We find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation Guide to the facts of the present case, we find that bouquet of services proposed to be provided would constitute as a package for single consideration. Further we find from nature of services that applicant s role in respect of adoption and implementation of AM s advertising policy, conducting sales promotion through exhibition trade, liaising with customer etc. is in the nature of assistance to AM in conducting said activities and not actual provision of services on his own account. In view of this the applicant s case is squarely covered by the decision in case of M/S. Godaddy sited supra with Marketing Research as the principal supply. This finding of ours is based on the observation that conducting market survey and information on Indian market trends are main services that determine the nature and scope of Indian Market Potential for recipient of services. With regards to the classification of services under the rate notification 11/2017 as amended from time to time, and the annexure of classification of services we find following entries that are relevant for the present purpose. Sr.no. Chapter, section, heading or group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Services Tax Act, 2017) NO.GST-ARA-35/2018-19/B-108 Mumbai, dt. 05/09/2018 For reasons as discussed in the body of the order, the questions are answered thus Question:-1. Whether the service supplied by the Applicant under the Service Agreement dated 1 March 2013 constitute a supply of Support services falling under HSN code 9985 Intermediary service classifiable under HSN code 9961 /9962? Answer: (i) The services provided by the applicant in the nature of Research on the matter related to functioning of the holding of company such as - corporate accounting, corporate, finance, corporate personnel and labour relations, corporate research and development, quality assurance and corporate intellectual property, and provide Party A with its report of the research thereon would fall under service code tariff 99859 as other support services nowhere elsewhere classified. (ii) The services provided by the applicant in the nature of Information on Market in the territory which includes - Economic, industrial and technical information on the products falling under the category of the Products and their markets, trends and outlook together with similar ..... 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