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TMI Blog2021 (3) TMI 1342X X X X Extracts X X X X X X X X Extracts X X X X ..... ority for Advance Ruling (hereinafter referred to as MAAR). BRIEF FACTS OF THE CASE 3.1 The Appellant is a proprietor supplying digital goods, i.e., 'online gaming'. 3.2 Appellant has submitted that, in electronic commerce, digital goods are described as goods, which are stored, delivered and used in electronic format and shipped electronically to the consumer through email or downloaded from the Internet. 3.3 Appellant, relying upon the definition of 'Digital Goods' provided in Wikipedia, submitted that Digital goods are products and services that are completely delivered using information technology, i.e., they don't involve an exchange of physical things. 3.4 Appellant's website address is MMOPLAYSTORE.COM. Applicant contacts the suppliers of digital products requesting a list of digital products that are available with them. Digital goods are then sent to the Appellant by Email or Instant message service and payout is issued. These received digital goods are accessed and stored on Cloud Servers for dispatching to customers of the Appellant. Customers visit the Website of the Appellant online and make payments to the Appellant, after which Digital Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of seeking clarity regarding the applicability of GST on the transactions under question had filed an application for the Advance Ruling before the MAAR. The questions asked by the Appellant in their Advance Ruling Application were as under: (i) Whether "e-goods". as commercially known in the market, are "goods" as defined in the GST Acts or are they services as per GST Act? (ii) If they are goods, what is the HSN classification and if services, what is the service classification and rate of GST on its sale/ supply within state? (iii) Whether they are exempted from GST? (iv) If Not exempted, what is the rate of GST on supply? (v) In what circumstances will IGST, under reverse charge. be applicable or whether it is applicable in the situation of procurement from foreign supplier and suppl), from out of India as discussed above? (vi) If the customer is from India and paying the consideration in dollar, whether it will be allowed as exports or if not allowed as exports then whether GST is leviable? What is rate of SGST & CGST or IGST? Under which HSN Code or SAC? (vii) If customer pays for the e goods in Indian rupees and goods delivered through CLOUD located outs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with the place of supply provision laid under Section 13 (12) of the IGST Act, 2017. (vi) That if the customer is from India and paying the consideration in dollar, then the subject transaction undertaken by the Appellant would attract levy. of GST as the place of supply in that case would be in the taxable territory in accordance with the place of supply provision laid under Section 13 (12) of the IGST Act, 2017. (vii) That if customer pays for the e goods in Indian rupees and goods delivered through CLOUD located outside India, the MAAR held that this transaction would attract levy of GST as both the supplier and the recipient of services are located in India, i.e., the taxable territory and hence the Appellant is liable for GST. (viii) Vide this question the Appellant proposed that in case where customer / buyer was from out of India and payment is done in dollar, according to them it was export of goods / services and therefore neither SGST & CGST was leviable. In this regard, the MAAR held that since the Appellant did not provide the details of their customers/buyers of e-goods, it was not possible to ascertain the location of the recipient of the services under consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suppliers, the MAAR held that the said transaction would attract IGST at rate of 18%. 3.8 The Appellant, being aggrieved by the rulings given by the MAAR has preferred the present appeal before the Maharashtra Appellate Authority for Advance Ruling (hereinafter referred to "the MAAAR"). The said Appeal has been filed with an application for the condonation of delay amounting to 20 days from the due date of filing of the Appeal. With regard to the said delay of 20 days, the Appellant, vide their letter dated 03.02.2021, has inter-alia submitted as under: (a) that he was required to attend his 90-year-old maternal grandfather, who was not well; (b) that his consultants were very busy in GST and Income Tax Audit: (c) that the delayed tiling of the present appeal is neither deliberate nor intentional; GROUNDS OF APPEAL 4. The Appellant. in their Appeal memorandum, have, inter-alia. mentioned the following grounds: (i) That the MAAR has not provided him sufficient opportunity for representing the facts of the case including submission of the requisite documents related to the transaction of e- goods. Therefore, the impugned MAAR order has been issued against the principles of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision laid under Section 13(12) of the IGST Act, 2017. (vii) That if customer pays for the e goods in Indian rupees and goods delivered through CLOUD located outside India, then this transaction would attract levy of GST as both the supplier and the recipient of services are located in India, i.e., the taxable territory and hence the Appellant is liable for GST. (viii) As regards the question wherein the Appellant proposed that in case where customer / buyer was from out of India and payment is done in dollar, the Respondent has submitted that the transaction under question will be considered as export of supply in terms of Section 2(6) of the IGST Act, 2017 as all the 5 conditions prescribed therein are satisfied by the transaction under question. (ix) As regards the question wherein the Appellant has asked that in case the buyer is from India. the goods/ services are stored in CLOUD which were the servers outside India. and the payments are received in rupees, it has been submitted by the Respondent that the subject services will not be considered as export of services as both the supplier as well as the recipient of services are located in India. i.e., in the taxable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Authority, wherein it has been held that the impugned e-goods which the Appellant are dealing with will be considered as services and the same will be classified under the SAC 998439 bearing the description "Other online contents not elsewhere specified". The MAAR has further held that the said online gaming services classified under the SAC 998439 bearing the description "Other online contents not elsewhere specified" will be considered as -online information database access or retrieval services" and the same is not exempted from the levy of GST. It has further been held that said OIDAR services received by the Appellant from their foreign suppliers/vendors of the impugned e-goods will attract levy of IGST under reverse charge basis at the hands of the Appellant in terms of Section 5(3) and 5(4) of the IGST Act. 2017. As regards the question regarding export of services where their customers are located abroad and the payment is received in the foreign exchange, the MAAR has held that since the Appellant did not provide the complete details of their customers, it is not possible to ascertain the place of supply in light of the explanation to the Section 13 (12) of the IGST Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew that since their customers are located abroad and the payments are received in the foreign exchange, these transactions should be considered as export of services, and accordingly, no liability of IGST or CGST and SGST should arise in this case; 9. Having pointed out the disputed issues as mentioned hereinabove, we set out to examine the place of supply in case of the impugned OIDAR services. In this regard, reference is invited to the provisions of Section 13 (12) of the IGST Act, 2017, which is being reproduced herein under: (12) The place of supply of online information and database access or retrieval services shall be the location of the recipient of services. It is an undisputed fact that the Appellant are the recipient of the impugned OIDAR services procured from their foreign supplier/vendors, hence the place of supply in this case will be the location of the recipient, i.e., the Appellant, who are located in India. i.e., in the taxable territory. The definition of 'import of services' under the IGST Act. is as follows:- (i) the supplier of service is located outside India. (ii) the recipient of services is located in India (iii) the place of supply o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are located in India and the place of supply is also in India, hence, the Appellant will be liable to pay GST on the transaction under consideration. The Appellant has argued that the same (whether consideration is received in dollars or rupees) is an out and out transaction and no GST is payable. It is already held in the preceding paragraph as to how there is import of the services by the Appellant from the foreign supplier and even though the goods are not downloaded, there is a supply of goods from the foreign supplier to the Appellant. In that view of the matter, there is no case of an out and out sale- there is import of digital goods by the Appellant by which he gets the right to transfer it to his customers and as his customers are located in India, it will attract GST. As to whether it attracts SGST-CGST or IGST will depend upon the location of the customers in India- whether in or out of Maharashtra. As regards this issue under discussion, we approbate the ruling pronounced by the MAAR and reject the contention, put forth by the Appellant in as much as the supply of the subject e-goods to the Indian customers are being made through the Cloud Servers located abroad. 1 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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