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TMI Blog2019 (7) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... t is ruled that IGST is payable, the procedure to be followed for payment of IGST as the GST portal does not permit the payment of IGST where the place of supply is indicated as state of Maharashtra. At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- 1. M/s. Bilcare Ltd. (herein referred to as the "Applicant") is a company engaged in the following * Applicant is an innovation-led packaging solutions provider that partners with the pharmaceutical industry to improve patient healthcare outcomes. We endeavor to deliver effective and affordable solutions that enhance the speed and quality of drug discovery and help build and protect brands by ensuring the delivery of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Herceptin and Hercules) then 2 cubicles of 0.5 cu. m will be charged for 21 months period (21 months X2 cubicle/month=42 Bins= 12558 USD) Storage Cost for PK Retain (2-8 Deg C) kits 12 299 3588 This is the storage cost of PK retains received from site at end of the study for min. 6 months. We have assumed that 2 cubicles (for 2 products) of 0.5. cubic meter size will be required per month at 2-8 Deg C to store Herceptin and Hercules and will be charged as per the utilization @ USD 299 per 0:5 Cu. Mtr. Cubicle per Month for 2-8 Deg C. (6 months X2 cubicle/month=12 Bins) Distribution Processing Fee (2-8 Deg C) 48 100 4800 This cost includes the cost of pick and pack service for 48 shipments to 4 sites in India per site 12 shipments. It is assumed each shipment would have 11-17 vials and 1 shipper. Hence, the total distribution processing fees would be charged on the basis of utilization shipper per shipment @ USD 100. (48 shipments x 1 shipper per shipment=48 shippers) Distribution Processing Fee (2-8 Deg C) Shipment to Ireland Depot 1 200 200 This cost includes the cost of pick and pack service for 1 shipment to Ireland depot. It is assumed that shipment would have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Vial Monocarton and sealing of vial monocarton. 3. Activity will be carried out at 15-25 Deg C. 4. Assumed relabeling of 202 vials and mono cartons. 3,691.00 Label Cost This is cost of 1. Label design/setup 2. Preparation of label proofs 3. Printing of New Retest Date Labels 4. Label Inspection and Release 5. Printing of Total 210 labels 6. Label language: English Note: Tamper seals will be provided by PPD 252.00 Storage Cost (Shelf- Labels) Storage cost includes storage of labels for 1 month during packaging run. The storage of labels will be charged as per actual utilization @ USD 83 per shelf per month. 83.00 Total Cost in USD 4,026.00 Add Government Service Tax @ 15% in USD 603.90 Grand Total in USD (Including Government Service Tax 15%) 4,629.90 A. Question 1: Common for all the above-mentioned nature of services provided Determining whether the various services provided to foreign clients i.e. situated outside India and for watch the place of supply is in the taxable territory shall be liable to Integrated Tax (herein referred to as IGST) or Central Goods and Service Tax (herein referred to as "CGST") and State Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als with determination of the nature of supply: 4. Both, Section 7 & Section 8 determines the nature of supply having regard to the 'location of supplier' and 'place of supply'. In the instant case, the location of supplier, location of service recipient and place of supply is as below: a. Location of supplier of service - The location of supplier (i.e. the applicant) is in Pune. Further, the applicant is registered under GST in the State of Maharashtra. b. Location of recipient of service - The location of recipient is outside India. Further, the service recipients are Pharmaceutical Companies or a CRO (Clinical Research Organization) situated outside India. c. The Place of supply- Since the service recipient is located outside India, place of supply of services provided shall be determined as per the provisions of Section 13 of the IGST Act. Further, the place of supply for all the services provided by the applicant shall be determined as per the applicable sub sections of Section (13)(3) and thus the place of supply for all the services, will be in the taxable territory i.e. in India. 5. Determination of Nature of Supply 1. As per Section 8(2) of IGST Act, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7(5)(C) of the IGST Act, specifies that - supply of services in the taxable territory which is not an intra-state supply, and which is not covered elsewhere shall be treated as inter-State supply. The said section is reproduced below: (5) Supply of goods or services or both, - (a) when the supplier is located in India and the place of supply is outside India; (b) to or by a Special Economic Zone developer or a Special Economic Zone unit; or (C) in the taxable territory, not being an intra-State supply and not covered elsewhere in this section, shall be treated to be a supply of goods or services or both in the course of inter State trade or commerce. Therefore, where the place of supply as per sub-sections of Section (13)(3) of the IGST Act for the services mentioned in Annexure-A, comes to a location in India i.e. services are provided in the taxable territory then the nature of supply of such services shall be determined as per the provisions of Section 7(5)(C) of the IGST Act. Thus, it is submitted that as per Section 7(5)(c) of the IGST Act, the supply of services shall be treated as Inter-State supply and accordingly as per Section 5(1) of IGST Act, 2017, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bilcare Ltd, is having the place of business and is registered in State of Maharashtra under the GST Law. Thus, the location of the supplier is in India but the location of recipient of the services is outside India. In order to classify service as export of service as per sub-clause (iii) of sub-section (6) of Section 2 of the integrated Goods and Services Tax Act, 2017, the place of supply of service should be outside India. Since the applicant, being supplier of service is located in India and. its recipient is located outside India, the provisions of Section 13 of the IGST Act, 2017 will be applicable in the subject case. As per provisions of clause (a) of sub-section (3) of Section 13, the place of the supplier of the above services viz, services supplied in respect of goods which are required to be made physically available by the recipient of services by the supplier of services shall be the location where the services are actually performed. Thus, in view of the provision of sub-clause (iii) of sub-section (6) of Section 2 read with clause (a) of sub-section (3) of Section 13 of the IGST Act, the place of supply shall be in the State of Maharashtra as in the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evy of Goods and Services Tax (GST) under the GST Law. The answer to the above question can be found in the Section 13 of the IGST Act, 2013 which is reproduced below: "Section 13 --------- 13. (1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India. (2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services: Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services. (3) The place of supply of the following services shall be the location where the services are actually performed, namely:- (a) services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services: Provided that when such services are provided from a remote location by way of el ..... 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