9911796707
TMI BlogClarification relating to export of services-condition (v) of section 2(6) of the IGST Act 2017X X X X Extracts X X X X X X X X Extracts X X X X ..... biguity caused in interpretation of the Explanation 1 under section 8 of the Integrated Goods and Services Tax Act 2017 in relation to condition (v) of export of services as mentioned in sub-section (6) of the section 2 of the Integrated Goods and Services Tax Act, 2017. Doubts have been raised whether the supply of service by a subsidiary/ sister concern/ group concern, etc. of a foreign company in India, which is incorporated under the laws in India, to the foreign company incorporated under laws of a country outside India, will hit by condition (v) of sub- section (6) of section 2 of Integrated Goods and Services Tax Act. 2. The matter has been examined. In view of the difficulties being faced by the trade and industry and to ensure u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tside 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 As per the above Explanation, an establishment of a person in India and another establishment of the said person outside India are considered as establishments of distinct persons. 3.3 Reference is also invited to the Explanation 2 of Section 8 of Integrated Goods and Services Tax Act, which is reproduced below: Explanation 2. A person carrying on a business through a branch or an agency or a representational office in any territory shall be treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or under any previous company law; (42) foreign company means any company or body corporate incorporated outside India which- (a) has a place of business in India whether by itself or through an agent, physically or through electronic mode; and (b) conducts any business activity in India in any other manner. Analysis of the issue : 4.1 Clause (v) of sub-section (6) of section 2 of Integrated Goods and Services Tax Act, which defines export of services , places a condition that the services provided by one establishment of a person to another establishment of the same person, considered as establishments of distinct persons as per Explanation 1 of section 8 of Integrated Goods and Services Tax Act, cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice, located in any other country and not incorporated under the laws of the said country, shall also be considered as supply between establishments of distinct persons and cannot be treated as export of services. 4.4 From the perusal of the definition of person under sub-section (84) of section 2 of the Andhra Pradesh Goods and Services Tax Act, 2017 and the definitions of company and foreign company under Section 2 of the Companies Act, 2013, it is observed that a company incorporated in India and a foreign company incorporated outside India, are separate person under the provisions of Andhra Pradesh Goods and Services Tax Act and accordingly, are separate legal entities . Thus, a subsidiary/ sister concern/ group concern of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilarly, the supply from a company incorporated in India to its related establishments outside India, which are incorporated under the laws outside India, would not be treated as supply to merely establishments of distinct person under Explanation 1 of section 8 of IGST Act 2017. Such supplies, therefore, would qualify as export of services , subject to fulfilment of other conditions as provided under sub-section (6) of section 2 of Integrated Goods and Services Tax Act. 6. It is requested that suitable trade notices may be issued to publicize the contents of this Circular. 7. Difficulty, if any, in the implementation of this Circular may be brought to the notice of the Chief Commissioner. Ravi Shankar Narayan Chief Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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