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TMI Blog2021 (8) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... - Barring Self Assessment, the Assessment to tax is the function of Revenue. We shall not employ the concept of Best Judgement Assessment to pronounce our Ruling based on reasoning on limited information available, for without examination of relevant Agreement/ Contract, neither shall we trespass to declare subject supply taxable, if in legality it weren t, nor shall we declare it zero rated citing that applicant has noting contrary in his written submission sans Agreement/ Contract. - GUJ/GAAR/R/36/2021 (In Application No. Advance Ruling/SGST&CGST/2021/AR/03) - - - Dated:- 30-7-2021 - SANJAY SAXENA AND ARUN RICHARD, MEMBER Present for the applicant : Shri Nishant Shukla, Advocate. Brief Facts: The applicant, M/s. Maxpressure Systems LLP, submitted that it is an independent service provider who supplies marketing and sales promotion services to foreign vendors outside India. They do not have any agreement or contract with any of the foreign vendors but as and when the foreign vendors feel necessary, it may approach the applicant to avail its services. 2. The applicant provides service of conducting market survey, providing information on Indian market tren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and submitted that they provide services to foreign vendor on its own account as an independent entity. Therefore, they do not fall under the category of intermediary services. The applicant has referred the meaning of Facilitate and as per Cambridge Dictionary, Facilitate means to help people deal with process or reach an agreement or solution without getting directly involved in the process, discussion, etc. 7. The definition of Intermediary Services under the Pre-GST Regime and GST Regime is pari materia and thus, the understanding and explanation and interpretation of intermediary services under pre-GST regime is equally applicable under GST. The applicant has referred to and gain support from the para 5.9.6 of CBEC s Education Guide dated 20.06.2012 which though released under the pre-GST regime, the framework and the intention of the Government would hold true even under the GST regime. The said Education guide while explaining the term intermediary clearly states that a person who arranges or facilitates a provision of a service, but provides the main service on his own account, is excluded from the scope of the term intermediary . The applicant has submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of imagination. Even the interpretation and understanding given by CBEC in Education Guide supports the understanding of the applicant that services provided by the applicant cannot be considered as intermediary services . 9. The definition of export of services provided under section 2 (6) of the IGST Act reads as follows: 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; 9.1 The applicant has submitted that they fulfill all the above conditions in order to be classified as Export of Services . Condition I- Supplier of service is located in India The applicant is registered under GST and providing the service from Ahmedabad, India. Hence fulfilling the first condition. Condition-II ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 13 (3) to 13(13) does not include services provided by the applicant then it falls under residuary clause i.e. 13(2). As per section 13(2) the place of supply would be the place of recipient of services and in the present case, the place of recipient of services is outside India as the service receiver is foreign vendor to whom the applicant has provided services and as a corollary the services provided by the applicant become eligible to be termed as Export of Service being classified as Zero Rated Supplies. 11. The applicant has submitted that by no stretch of imagination, services provided by them termed as Intermediary Services as they do not work as an intermediary who facilitates or arranges the transaction. They provide service on Principal to Principal basis on its own account and not under any agreement or obligation. At the most, their services can be termed as either Market Research Services or Support Services which in turn are eligible as Export of Services to be classified as Zero Rated Supplies. 12. The applicant has submitted that the question raised by the applicant in no manner relates to determination of Place of Supply . However, for the sake ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant has any right to influence or assist either vendor or customer in closing the deal and it is at complete and sole discretion of the prospective buyer and foreign vendor whether to proceed with deal or not. The applicant has no role to play either during the negotiations between the parties to close the deal or even after deal is closed. The applicant provides services on its own account as an independent service provider and raises invoice upon the foreign vendor upon completion of its services. The foreign vendor makes the payment to applicant in convertible foreign exchange. 14.2 The applicant further submits that there is no written or oral agreement between the foreign vendor and applicant. The foreign vendor is at liberty to approach any other service provider in relation to such services and at the same time it is open for applicant to deny to provide such services to foreign vendor. The entire services are provided on Principal to Principal basis and there is no relationship of Principal and Agent between applicant and foreign vendor either expressly or impliedly. The foreign vendor has reserved the right to decide and determine the fees/charges payable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the applicant is a zero Rated Supply or Normal Rated Supply under the GST Act? 2. If the services provided by applicant are Zero Rated Supplies then can the same be considered as Export of Services? Personal Hearing 15. Shri Nishant Shukla, Advocate appeared on 30-6-21 and reiterated the contents of the application. On being asked, Shri Shukla reiterated that no contracts/agreements have been entered between the applicant and its foreign vendors/clients in respect of the subject services supplied by them. FINDINGS 16. At the outset we would like to make it clear that the provisions of CGST Act and GGST Act are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the GGST Act. 17. We have carefully considered all the submissions made by the applicant. 18. During personal hearing, on being enquired by the Authority, Shri Shukla submitted that the applicant is supplying Service to only one foreign vendor n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Automative Industry for year 2021, the applicant to arrive at it s report had discussions with Purchase offices of past customers of SITEC product lines and discussions with Director level persons of eminent organizations. Further, the applicant supplied a list of six potential buyers of SITEC products in Indian market and mentioned that catalogues of SITEC products was supplied to 15 business establishments including aforementioned potential buyers. Further the service charges was raised for preparing this report and customer interactions by the applicant. 21. It is on record that the applicant had discussions with entrepreneurs as well as established manufacturers and supplied list of potential buyers to the service recipient. Without a copy of contract/Expression of Interest in this case, the scope of supply cannot be arrived at. We note that to exclude the supply from the scope of intermediary service, the applicant should supply such services on his own account. Intermediary is defined at Section 2(13) of the IGST Act, as follows: (13) intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of good ..... X X X X Extracts X X X X X X X X Extracts X X X X
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