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TMI BlogGST - IntermediaryX X X X Extracts X X X X X X X X Extracts X X X X ..... GST - Intermediary X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturer in India who exports goods and for this purpose if he engages a logistic company and all transportation services are undertaken by the manufacturer through the logistic company in India from factory to port and onwards till destination say Brazil and when he invoices for goods he includes all costs and exports them in above scenario will the manufacturer exporter be called as intermedia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry for the logistic services performed through logistic company for export from India till brazil and thus be liable for tax on the services Reply By KASTURI SETHI: The Reply: Sh.Madhavan Iyengar Ji, Answer is NO. Further my views are as under:- In the situation explained by you, the manufacturer-exporter cannot be called as 'intermediary' for logistic services because of the phrase/se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntence, "but does not include a person who supplies such goods or services or both or securities on his own account" mentioned in the definition of 'Intermediary' under Section 2(13) of IGST Act. The activity of manufacturer-exporter is restricted to 'arranging or facilitation' only. Now pl. refer to the sentence used by you as "when he invoices for goods he include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s all costs". If invoice includes all the costs relating to logistic services, it means the manufacturer exporter will charge and account for the said expenses in his books of account which is not permitted as per definition of intermediary. An intermediary is a person who is supposed/required to be concerned with his commission only. Only commission is his consideration. If he charges any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther amount in addition to commission, he will lose the legal status of an intermediary as defined in IGST Act. In real terms, an intermediary is a pure agent and not more than that. Here it is pertinent to peruse the definitions of an 'intermediary' in the pre-GST era and in the present GST regime. Section 2(13) of IGST Act, 2017 "intermediary" means a broker, an agent or any other person, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 services or both or securities on his own account; Rule 2(f) of POPS, Rules, 2012, "intermediary" means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision of a service (hereinafter called the 'main' service) between two or more persons, but does not include a person who provides the main service on his account.; [Notification No. 28/2012-S.T., dated 20-6-2012] Rule 2 '(f) of Place of Provision of Services Rules, 2012 "intermediary" means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of a service (hereinafter called the 'main' service) or a supply of goods, between two or more persons, but does not include a person who provides the main service or supplies the goods on his account;'; [Notification No. 14/2014-S.T., dated 11-7-2014 In all the above definitions the phrase 'on his own account' exists. In the GST regime the word, 'own' has been added. The phr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase 'one his own' has been an integral part of the definition of 'intermediary' since 2012 and prior to that it was covered in the definition of 'commission agent' under the category of BAS. This very phrase is the vital force/essence of the definition of 'intermediary' and Board's circular cannot change the essential character of the Act. Moreover, it is also n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot the intention of the circular.
Reply By Madhavan iyengar:
The Reply:
Thanks sir for giving a very good insight and perspective and finer points of gst law and comparison with erstwhile service tax provisions. X X X X Extracts X X X X X X X X Extracts X X X X
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