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TMI Blog2021 (4) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... again transportation of the goods (which are temporarily imported) provided by them can be considered as export of services or not? - HELD THAT:- The service recipients (the clients of the applicant located outside India in the instant case) neither have a place of business in India for which registration has been obtained nor do they have any place of business other than the place of business for which registration has been obtained, in India. In view of the above, we find that the conditions (a) and (b) are not applicable in the instant case. Further, since condition (c) above is also linked to (a) and (b), the said condition can also not be made applicable to the instant case. We, therefore, conclude that only condition(d) which states that in absence of such places as mentioned at (a),(b) and (c) above, the location of the usual place of residence of the recipient, is applicable in the instant case - thus the place of supply of services, in the instant case, will be the location of the recipient of services i.e. out of India. We therefore find that condition(ii) of Section 2(6) of the IGST Act, 2017 is also fulfilled. As per Sub-section (2) of Section 13, the place o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent for the applicant : Shri Amish Khandhar C.A / Rashmin Vaja C.A BRIEF FACTS The applicant M/s. Manoj Bhagwan Mansukhani (M/s.Rishi Shipping), Plot No.113-116, Rishi House, Ward No.6, Industrial area, Gandhidham, Kutch-370201 is service provider operating in Kandla port; that till this time they were handling imported fertiliser in bulk of Indian fertiliser companies, importing fertiliser from abroad and on their behalf they used to discharge bulk fertiliser from the vessels, packing it into bags and then make despatches by Rail, Road and water; that recently Government has allowed foreign suppliers to send bulk fertiliser for value addition and store in Custom Bonded warehouse without payment of the custom duty and GST and after packing bulk fertiliser, they are to stuff the fertiliser in bags into containers and despatch the same to same foreign suppliers or to his order; that since party is sending bulk fertiliser for only job work in custom bonded godowns and paying them about 9.8 USD per MT for services, they are to return the same and charge them only USD 9.8 per MT. 2. The applicant has submitted that the foreign supplier cannot afford to pay GST on their ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed establishment elsewhere), the location of such fixed establishment; (c) where a supply is received at more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply; and (d) in absence of such places, the location of the usual place of residence of the recipient; The applicant has reproduced the Explanation-1 to Section-8 as below: Explanation 1. For the purposes of this Act, where a person has, (i) an establishment in India and any other establishment outside India; (ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or (iii) an establishment in a State or Union territory and any other establishment being a business vertical registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons. 3.2 The applicant has submitted that in their view, to qualify any supply of service as export of service, it is required to meet all five clauses of Section 2(6) of IGST Act, 2017: (i) They are a registe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 09.01.2019 with Globcom International FZC, Sharjah, UAE. (3) Agreement dated 10.06.2019 with RE Energy FZE, Sharjah, UAE. (4) Agreement dated 15.06.2019 with Sun International FXE, Dubai, UAE. (5) Agreement dated 18.12.2019 with Swiss Singapore Overseas Enterprises PTE Ltd., Singapore. DISCUSSION FINDINGS: 5. We have considered the submissions made by the applicant in their application for advance ruling as well as the arguments/discussions made by their representative Shri Amish Khandhar and Rashmin Vaja at the time of personal hearing. We have also considered the issues involved on which Advance Ruling is sought by the applicant. 6. At the outset, we would like to state that the provisions of both the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to similar provisions of the GGST Act. However, since the present application submitted by the applicant deals with export of services i.e. supply of services to persons located o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of their various clients as mentioned in para-4 above. We have gone through the copy of Warehouse License Number: PRIVATE/02/2019 dated 03.07.2019 issued by the Assistant Commissioner(Bond), Custom House, Kandla under which the warehouse of the applicant has been licensed as a Private Bonded Warehouse. We have also gone through the sample copies of the bills of supply issued by the applicant to these clients in respect of the services rendered by them and find that the values mentioned therein is in dollars. We also find that as mentioned in a couple of the aforementioned agreements, M/s. Rishi Shipping(the applicant) is a well-known entity in the business of warehousing and storage activities of tradable commodities and also undertakes job work for fertilizer commodities such as handling, packing and dispatches at Kandla Port, India. Further, as per the aforementioned agreements, the clients of the applicant will dispatch fertilizers cargo in bulk by vessel calling Kandla port and the applicant will make arrangements for stevedoring of the same and safely transport the goods to custom bonded warehouse and protect cargo, maintaining security. These clients require to del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransportation, storage, bagging, stuffing and again transportation of the goods (which are temporarily imported) provided by them can be considered as export of services or not. For this purpose, we will first be required to refer to Section 2(6) of the IGST Act, 2017 which lays down the conditions to be fulfilled for being an export of services. Section 2(6) of the said Act reads as under: 2(6) export of services means the supply of any service when, (i) the supplier of service is located in India; (ii) the recipient of service is 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; 11. We find that services provided by the applicant can be covered under export of service , if and only, if all the five conditions cited above are fulfilled/satisfied. Therefore, in order to confirm as to whether the services rendered by the applicant in the instant case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (d) which states that in absence of such places as mentioned at (a),(b) and (c) above, the location of the usual place of residence of the recipient, is applicable in the instant case. In view of the facts mentioned above, we find that the place of supply of services, in the instant case, will be the location of the recipient of services i.e. out of India. We therefore find that condition(ii) of Section 2(6) of the IGST Act, 2017 is also fulfilled. 13. Further, as per condition(v) of Section 2(6) of the IGST Act, 2017, the supplier of service and the recipient of service should not merely be establishments of a distinct person in accordance with Explanation 1 in section 8 to fulfil the condition of export of service . Therefore, in order to find out what establishments of a distinct person stands for, we will be required to refer to Explanation 1 of Section 8 of the IGST Act, 2017 which reads as under: Explanation 1. For the purposes of this Act, where a person has, (i) an establishment in India and any other establishment outside India; (ii) an establishment in a State or Union territory and any other establishment outside that State or Union territor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied 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 electronic means, the place of supply shall be the location where goods are situated at the time of supply of services: Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs and are exported after repairs without being put to any other use in India, than that which is required for such repairs; (4) The place of supply of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under clause (a) of section 45A of the Reserve Bank of India Act, 1934; (c) financial institution shall have the same meaning as assigned to it in clause (c) of section 45-I of the Reserve Bank of India Act, 1934; (d) non-banking financial company means, (i) a financial institution which is a company; (ii) a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or (iii) such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette, specify. (9) The place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods. (10) The place of supply in respect of passenger transportation services shall be the place where the passenger embarks on the conveyance for a continuous journey. (11) The place of supply of services provided on board a conveyance during thecourse of a passenger transport operation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant falls. We find that the services such as stevedoring, transportation, storage, bagging, stuffing and again transportation of the goods (which have been temporarily imported into India as discussed earlier) would fall under sub-section(3) of Section 13, since the goods are required to be made physically available by the recipient of services to the supplier of services in order to enable the supplier to supply the aforementioned services. Section 13(3)(a) reads as under: 13(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 electronic means, the place of supply shall be the location where goods are situated at the time of supply of services: Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly of Services will be considered to be in India as per Section 13(3)(a) of the IGST Act, 2017 since the second proviso to Clause(a) sub-section (3) of Section 13 is not applicable to the applicant. (iv) The payment of the services rendered by the applicant is received by the applicant in convertible foreign exchange as is apparent from the copies of bills of supply submitted by the applicant wherein the value of supply is mentioned in dollars. (v) The supplier of the service (the applicant) as well as the recipients of service (their clients) are not merely establishments of a distinct person in accordance with Explanation 1 of Section 8 of the IGST Act, 2017 as is apparent from the copies of the warehouse cum job-work agreement made by the applicant with their Overseas suppliers(Non-residents) and are not related to each other. In view of the above, we conclude that the services rendered by the applicant are not covered under Export of services as envisaged in Section 2(16) of the IGST Act, 2017. 18. Further, we find that as per Integrated Goods and Services Tax (Amendment) Act, 2018 (32 of 2018), there is an amendment in the second proviso to sub-section (3) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to achieve a particular result. We find that we can draw parallel from the above definition, to the series of actions i.e. activities/services undertaken by the applicant such as: (i) stevedoring, transportation of the fertilizers/goods from the vessel to the warehouse and services rendered such as storage, bagging, stuffing of the said fertilisers/goods at the warehouse resulting in the storing of cargo in the custom bonded warehouse (ii) removal of the said goods from the said warehouse by again transporting the goods (which have been temporarily imported into India) from the custom bonded warehouse as per requirement of the client and dispatch of cargo as per requirement within 2/3 months(for export) resulting in the export of the goods to the ultimate buyer from the custom bonded warehouse. Thus, it can be derived that the activities/services rendered by the applicant as mentioned above can be covered under the definition of process . Further, as discussed earlier, the applicant undertakes job work for fertilizer commodities such as handling, packing and dispatches at Kandla Port. Further, it is very much apparent from the copies of the agreements submitted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the conditions of export of service as envisaged in Section 2(6) of the IGST Act, 2017 vis-a-vis the activities/services rendered by the applicant in the instant case, w.e.f. 01.02.2019 are as under: (i) The applicant is a registered person located and operating from India. (ii) The location of Service Recipient will be the location of usual place of residence which is out of India, as per the provisions of Section 2(14)(d) of IGST Act, 2017. (iii) The place of Supply of Services will be considered to be out of India in view of the amended second proviso to Clause(a) sub-section(3) of Section 13 inserted w.e.f. 01.02.2019, hence in this case, general rule specified under Section 13(2) of IGST Act, 2017 will apply which will be the location of the service recipient which is outside India. (iv) The payment of the services rendered by the applicant is received by the applicant in convertible foreign exchange as is apparent from the copies of bills of supply submitted by the applicant wherein the value of supply is mentioned in dollars. (v) The supplier of the service (the applicant) as well as the recipients of service (their clients) are not merely est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that since it has determined that the services provided by the applicant are covered under export of service w.e.f. 01.02.2019, they will be covered under the provisions of Section 16(1)(a) as export of services w.e.f. 01.02.2019. As regards the eligibility of the applicant for Zero rated supply under Section 16 of the IGST Act, 2017, we find that the applicant shall not be eligible for Zero rated supply as per the provisions of the said section upto 31.01.2019. However, they will be eligible for Zero rated supply as per the provisions of Section 16(1)(a) of the IGST Act, 2017 w.e.f. 01.02.2019 26. In light of the above circumstances, we rule, as under R U L I N G Question-1: Whether above described services(in brief facts) considered to be Export of Service or not? Answer : The services such as stevedoring, transportation, storage, bagging, stuffing and again transportation of the goods (which have been temporarily imported into India) rendered by the applicant M/s. Manoj Bhagwan Mansukhani (M/s.Rishi Shipping), Plot No.113-116, Rishi House, Ward No.6, Industrial area, Gandhidham, Kutch-370201 shall not be considered as export of service upto 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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