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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 ..... ubject: Clarification relating to export of services-condition (v) of section 2(6) of the IGST Act 2017 reg. The Government of India. Ministry of Finance. Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing vide Circular No. 161/17/2021-GST dated 20 th September. 2021 has issued a clarification relating to export of services-condition (v) of section 2(6) of the IGST Act 2017, in order to ensure uniformity in the implementation of the provisions of law across the field formations, which is annexed herewith. In exercise of powers conferred by section168 of the Tripura State Goods and Services Tax Act, 2017 (Tripura Act No. 9 of 2017) for the purpose of uniformity in the implementation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 IGST Act. 2. The matter has been examined. In view of the difficulties being faced by the trade and industry and to ensure uniformity in the implementation of the provisions of the law across field formations, the Board, in exercise of its powers conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act ), hereby clarifies the issue in succeeding paragraphs. Relevant legal provisions: 3.1 The export of services has been defined in sub-section (6) of the section 2 of the IGST Act 2017 as under: (6) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited to the Explanation 2 of Section 8 of IGST 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 having an establishment in that territory. 3.4 Reference is also invited to the definition of person as provided under CGST Act 2017, made applicable to IGST Act vide section 2(24) of IGST Act 2017. Person has been defined under sub-section (84) of the section 2 of the CGST Act 2017, as under: (84) person includes- (a) an individual; (b) a Hindu Undivided Family; (c) a company; (d) a firm; (e) a Limited Liability Partnership; (f) an as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person to another establishment of the same person, considered as establishments of distinct persons as per Explanation 1 of section 8 of IGST Act, cannot be treated as export. In other words, any supply of services by an establishment of a foreign company in India to any other establishment of the said foreign company outside India will not be covered under definition of export of services. 4.2 Further, perusal of the Explanation 2 to section 8 of the IGST Act suggests that if a foreign company is conducting business in India through a branch or an agency or a representational office, then the said branch or agency or representational office of the foreign company, located in India, shall be treated as establishment of the said fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a subsidiary/ sister concern/ group concern of any foreign company which is incorporated in India, then the said company incorporated in India will be considered as a separate person under the provisions of CGST Act and accordingly, would be considered as a separate legal entity than the foreign company. Clarification: 5.1 In view of the above, it is clarified that a company incorporated in India and a body corporate incorporated by or under the laws of a country outside India, which is also referred to as foreign company under Companies Act, are separate persons under CGST Act, and thus are separate legal entities. Accordingly, these two separate persons would not be considered as merely establishments of a distinct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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