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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 ..... aid delay cannot be considered as intentional or deliberate on the part of the Appellant, and hence the said delay of 20 days is condoned in filing the subject Appeal in terms of the proviso to Section 100 (2) of the CGST Act, 2017. On perusal of the subject appeal memorandum filed by the Appellant, it is observed that the Appellant have not disputed the classification of the impugned e-goods dealt with by the Appellant where the MAAR has held the same as supply of services under the SAC 998439 bearing the description Other online contents not elsewhere specified . 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 - As per the definition of import of services, the supplier is outside India and the recipient i.e applicant is in India. The place of supply of OIDAR as per Section 13 (12) of the IGST Act is the location of the recipient of services. Therefore, all the conditions being fulfilled as the place of supply of service is in Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon 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. Export of the said OIDAR services being provided by the Appellant to their foreign customers - HELD THAT:- It is truly not possible to determine the place of supply of the subject OIDAR services without putting to the test all the seven non-contradictory conditions prescribed under explanation to Section 13 (12) of the IGST Act, 2017 with respect to the potential recipient of the subject OIDAR services. Also, the fulfillment of the conditions will be vis- -vis an evaluation of every single transaction undertaken by the Appellant - As the evaluation is based on pure facts, it is deemed proper not to answer it. - MAH/AAAR/RS-SK/34/2020-21 - - - Dated:- 16-3-2021 - SHRI RAKESH KUMAR SHARMA, AND SHRI SANJEEV KUMAR, MEMBER Present for the Appellant: Shri D.V. Retharekar, Advocate (Proceedings under Section 101 of the Central G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment is received, the Appellant provides the customer with digital item as an e-mail attachment or may provide a secure link where those digital items can be downloaded. 3.5 No invoice is raised for delivering the said digital goods, which have limited life, say a few days or weeks. Payments are done by his customers online. It is not a software sale and does not require license. There is no work involved at the site of the client. 3.6 Appellant has interpreted the underlying transactions as under: (a) Digital goods/e-goods are not necessarily goods as commonly understood and as defined in the CGST Act. 2017. but they can at best be called as services. (b) They are supply of services done through internet or mails. There is no delivery of e-goods as such. (c) The said e-goods. are stored on CLOUD SERVER which are located outside India, and the same are purchased from the vendors outside India who send it to the CLOUD as identified by the buyer / vendor/ the Appellant. (d) The e-goods are not received by the seller in India but are stored on CLOUD hence it cannot be said to be imports in India, hence out of the purview of the reverse charge mechanism pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are stored in CLOUD which are the servers outside India. therefore even though payment is received in rupees, it is again export of service being services are received from distantly installed servers. Hence No CGST and SGST is leviable? (x) Whether IGST is applicable under section 5 (3) 5 (4) of the IGST Act, according to us it is not because it is not imported into India and the services are stored on CLOUD and therefore it cannot be said to be imports and thus not liable for RCM? (xi) If suppose RCM is applicable then its rate? May please be clarified. 3.7 The MAAR. vide Order No. GST-ARA-06/2019-20/B-58 dated 15.12.2020 . held in respect of the aforesaid 11 questions asked by the Appellant as under: (i) that the supply of e-goods by the Appellant would be covered under supply of services under the CGST Act, 2017 in terms of the definition of the OIDAR Services provided under Section 2(17) of the IGST Act, 2017; (ii) That the said transaction of online gaming services would be classified under SAC 998439 bearing the description Other online contents not elsewhere specified in terms of the Annexure to the Notification No. 11/2017- Central Tax (Rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, namely- (a) the location of address presented by the recipient of services through internet is in the taxable territory: (b) the credit card or debit card or store value card or charge card or smart card or any other card by which the recipient of services settles payment has been issued in the taxable territory: (c) the billing address of the recipient of services is in the taxable territory; (d) the Internet protocol address of the device used by the recipient of services is in the taxable territory; (e) the bank of the recipient of services in which the account used for payment is maintained is in the taxable territory; (f) the country code of the subscriber identity module card used by the recipient of services is of taxable territory; (g) the location of the fixed land line through which the service is received by the recipient is in the taxable territory (ix) Vide this question. the Appellant asked that in case the buyer was from India, the goods/ services are stored in CLOUD which were the servers outside India, therefore, even though payment was received in rupees, it would be again export of service being services are received fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rement and the supply of the e-goods are being made out of India, i.e., the vendors/suppliers of the e-goods and his customer/buyer of the e-goods are both located outside India; (iv) That the said e-goods procured by him from his overseas suppliers are stored on the Cloud Servers located outside India; and that said e-goods are never downloaded by him on his system in India; and that the said e-goods are delivered to his customers located outside India by sending the key/password for accessing the e-games via mail; (v) That the payment for the e-goods from his overseas customers are received in foreign currency; (vi) That the services provided by him, will qualify as an export of service in terms of Section 2(6) of the IGST Act, 2017; RESPONDENT'S SUBMISSIONS 5. The Respondent vide their letter dated 25.02,2021 have filed the written submissions in respect of the subject Appeal, the extract of which is mentioned hereinbelow : (i) That the supply of e-goods under question will be treated as supply of services: (ii) That the said transaction of online gaming services would be classified under SAC 998439 bearing the description Other online co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rencing on 04.03.2021, which was attended by Shri D.V. Retharekar, Advocate, as the representative of the Appellant in the subject appeal matter. At the outset. he requested to condone the delay of 20 days in filing the subject Appeal on account of the following grounds: (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 filing of the present appeal is neither deliberate nor intentional; Consequently, he reiterated the grounds contained in the earlier written submissions of the Appeal memorandum and contended that since the impugned transactions of the procurement and supply of e-games are carried outside India, the same will not fall within the scope of levy of CGST, SGST or IGST. Hence, the supply of the e-goods to the foreign customers will be treated as export of services in terms of Section 2(6) of the IGST Act, 2017 and accordingly. the same will be considered as zero-rated supply in terms of Section 16 (1)(a) of the IGST Act, 2017. The jurisdictional officer in the subject case did not attend the said virtual hearing. DISCU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions prescribed therein are satisfied. 8. On perusal of the subject appeal memorandum filed by the Appellant, it is observed that the Appellant have not disputed the classification of the impugned e-goods dealt with by the Appellant where the MAAR has held the same as supply of services under the SAC 998439 bearing the description Other online contents not elsewhere specified . Here, we also agree with the ruling given by the MAAR in so far as the classification of the subject e-goods are concerned. The issues on which the Appellant have disputed with regard to the ruling enunciated by the MAAR are being enumerated herein under: (i) Whereas the MAAR has held that the Appellant will be liable to pay IGST under the Reverse Charge Mechanism in terms of Section 5(3) of the IGST Act, 2017, attributable to the place of supply falling in the taxable territory as per Section 13 (12) of the IGST Act, 2017, the Appellant are of the view that since the e-goods under question are not downloaded by them and the said e-goods are stored at the Cloud Services located abroad, thereby making the subject e-goods procurement transaction an out and out transaction, it can be said that the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply of OIDAR as per Section 13 (12) of the IGST Act is the location of the recipient of services. Therefore, the third condition is also fulfilled as the place of supply of service is in India. Therefore. the transaction qualifies for import of services. So even though the said e-goods, after being purchased by the Appellant. are stored on the Cloud Servers located outside India. and the same are not downloaded by the Appellant in India. the same will be import of services. The Appellant has made the payments to the foreign suppliers i.e consideration is paid which enables him to supply them to his customers or provide access to them- the fact that he gets the right to supply it to his customers shows that there is supply by the foreign supplier to the Appellant and the Appellant gets the right to supply it further. The transaction of purchase of e-goods from the foreign suppliers will attract the levy of IGST under the Reverse Charge Mechanism in terms of the provisions of Section 5(3) of the IGST Act, 2017 read with the Notification No. 10/2017-I.T. (Rate) dated 28.06.2017. Accordingly, the Appellant will be liable to pay IGST under reverse charge basis on the purchase of the e-g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oreign customers wherein the MAAR has held that it is not possible to ascertain the place of supply of the OIDAR services under consideration as the Appellant have not provided the details of their customers regarding the seven non-contradictory conditions enumerated in the explanation to the Section 13 (12) of the IGST Act, 2017. In this regard, we concur with the observation made by the MAAR as it is truly not possible to determine the place of supply of the subject OIDAR services without putting to the test all the seven non-contradictory conditions prescribed under explanation to Section 13 (12) of the IGST Act, 2017 with respect to the potential recipient of the subject OIDAR services. Also, the fulfillment of the conditions will be vis- -vis an evaluation of every single transaction undertaken by the Appellant. As the evaluation is based on pure facts, we deem it proper not to answer it. In view of this, the said question, as to whether the supply of subject OIDAR services by the Appellant to their foreign customers can be considered as export of services, cannot be answered in view of the aforesaid findings and shall be decided by the jurisdictional officer on the basis of f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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