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TMI Blog2022 (4) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... place of supply in subject case of the applicant as an intermediary would be the location of the supplier of services i.e. the location of the applicant which is located in the State of Maharashtra, India. As the place of supply of intermediary services to GTRS is location of applicant in India and consequently condition of export of services as per Section 2 (6) of IGST Act is not satisfied - question is answered in the negative. - GST-ARA-101/2019-20/B-53 - - - Dated:- 27-4-2022 - SHRI. RAJIV MAGOO, AND SHRI. T.R. RAMNANI, MEMBER NO.GST-ARA-101/2019-20/B-53 Mumbai, dt. 27.04.2022 PROCEEDINGS (Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act respectively by M/s. GULF TURBO SOLUTIONS LLP, the applicant, seeking an advance ruling in respect of the following questions. 1. Whether Marketing Services agreed to be provided by the Applicant under Marketing Services Agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cross culture advise ; Connecting prospective customers with representatives of GTRS for the purpose of obtaining orders and establishing/maintaining close commercial relation between GTRS and Customers ; Providing information on products its functioning, etc., to GTRS's Customers and notifying GTRS of any consumer complaints; Monitoring regulatory developments (including establishing and maintaining contact with regulatory agencies.); Any other assistance, regarding GTRS's marketing activities that may be reasonably requested by GTRS after the effective date in writing to GTS LLP. 2.5 Appointment of Applicant for Marketing Support services will be on P2P basis. Relationship between the parties will be that of independent contractors which do not intend to create relationship of Principal and Agent between both the parties. 2.6 Applicant will provide services to GTRS on its own account, will bear all its expenses connected with the performance of the services under the agreement. Applicant will not have authority to commit to any prospective customer either in terms of price, time, specifications or any other terms of contract. Acceptance of business Terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular territory report results thereof to GTRS. GTS LLP agrees to conduct, research on matters related to nature scope of overall market potential in India and international market, demand and supply of these products and services, major customers and major suppliers of similar services, quality and quantity requirements of the market and submit report on the research done. These services will be classified under SAC Code 998371- Market Research Services b. Assisting GTRS in conducting sales prospection through participation in industry events such as exhibitions, scientific gatherings, trade shows etc. These services will be classified under SAC Code 998596- Events, exhibitions and trade shows. c. Assisting GTRS in adaptation and implementation of its advertising policy. These service will be classified under SAC Code 998361- Advertising Services. d. Liaising with customers to understand their plans, strategy technical specifications requirements and reporting them to GTRS. These services will be classified under 99859 - Liaising and co-ordination activities. e. Providing feedback on the service requirements obtained during market survey to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alf and discounts that intermediary obtains must be passed back to the Principal. Separation of Value- The value of intermediary's service is invariably identifiable from the main supply of service that he is arranging. It can be based on an agreed percentage of sale or purchase price. Generally, an amount charged by the agent from his principal is referred to as 'Commission' Identity and Title- Service provided by intermediary on behalf of the principal is clearly identifiable. 2.15 Normally it is expected that intermediary or agent would have documentary evidence authorizing him to act on behalf of the provider of Main Service. It is clear from the Service Agreement that the relationship between the parties is that of independent contractors and it is further clear that agreement do not intend to create relationship of Principal and Agent. GTS LLP will not represent itself to be agent of GTRS and vice versa. 2.16 Further as the agreement applicant has no authority to conclude or negotiate any contract or secure any orders on behalf of GTRS. On the contrary applicant would provide service on his own account to GTRS to further augment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement is outside India i.e. Sharjah. The provisions of technical services as well as ship spares and turbo charges are outside India. Also, the receipt is outside the India and service provider is in India. The nature of business proves that both are not mere establishment of each other. Hence it is apparent from the agreement that the nature of transaction can quality as exports of services as per the section 2(6) of IGST Act 2017. Thus, the nature of transaction does not seem to be of support or intermediary services as per the documents available on record. 3.2 However the scope of sub clause b,d,e and g of clause (5) as per the agreement seem to be ambiguous. From the description of services mentioned in sub clause (b), (d), (e ) and (g) of clause 5, it is evident that applicant indulges in provision of services which could be treated as intermediary services. Hence this office is of the opinion that though all other criterion of export of services is fulfilled, the nature of services of M/s GST LLP is of intermediary nature. 04. HEARING 4.1 Preliminary e-hearing in the matter was held on 10.12.2020. Authorized representative of the applicant, Shri. Rajendra Jaha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has further submitted that, as per the agreement they will provide services on its own account and on a P2P basis with GTRS and therefore the impugned services cannot be covered under Intermediary Services. The applicant has also submitted that, the services supplied by them constitutes supply of 'Support Services' involving a composite supply with marketing services as principal supply and Bouquet of services proposed to be so provided would constitute as a package for single consideration. 5.4.1 Certain services mentioned in the applicant's submissions and reproduced in para 5.3 above does not support the applicant's contention that they will provide services on its own account and on a P2P basis with GTRS for example 'Liaising with Customers and potential Customers and to collect their Turbocharger Engine Room Machinery Service Spare parts specifications requirements, strategy, and reporting the information obtained through such customer interactions to GTRS' means that the applicant is interacting with customers on behalf of GTRS since information obtained from such customers is submitted to GTRS and therefore the applicant is definitely not ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant acts as a conduit between GTRS and customers in India, it therefore appears that the applicant is acting as an intermediary in the subject case. We will therefore, discuss the definition of an Intermediary as per GST Laws and see whether the applicant fits into the definition of an Intermediary. 5.5.2 It is necessary first, to understand the definition of 'intermediary' as defined in the CGST Act under Section 2(13) of the IGST Act which is reproduced as under:- intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account 5.5.3 As per the definition, an intermediary: (i) means a broker, an agent or any other person, by whatever name called, (ii) who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, (iii) but does not include a person who supplies such goods or services or both or securities on his own account. 5.5.4 We find that an intermed ..... 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