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TMI BlogExport of serviceX X X X Extracts X X X X X X X X Extracts X X X X ..... PQR, is based in the USA and XYZ is based in India. XYZ shall market and promote the Products of PQR in the territory of India as well as outside India., as authorized by PQR. Scope of the above marketing and promotion is as given below: For marketing and promotion of the Products within and outside India. For disseminating information about products, payments and booking conditions and terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of trade. For performing collections services, as may be required, for PQR sales in the territory. PQR shall annually pay an aggregate fee equal to 115% of Operating Costs of XYZ. Is XYZ liable to pay GST on this transaction? - Reply By Amit Agrawal - The Reply = What is constitutes 'intermediary' services - as defined u/s 2 (13) of IGST Act, 2017 - is controversial and open to di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent interpretation. Keeping aside above controversy for this post of mine, let me share my views about implications under GST if subject services, provided by XYZ, are held as 'intermediary' services as defined u/s 2 (13) of IGST Act, 2017 . And same is as follows: A. As condition u/s 2 (6) (iii) of the IGST Act, 2017 is not fulfilled, same cannot be called as 'Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort of Services'. B. Said services are neither inter-state supply u/s 7 nor intra-state supply u/s 8 of the IGST Act, 2017 when service-receiver (i.e. PQR) is located outside India. And any interpretation to make it as inter-state supply u/s 7 will in-turn make such provision unconstitutional to that extent. C. In my humble view, subject services are not taxable under current GST ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. if subject services, provided by XYZ, are held as 'intermediary' services as defined u/s 2 (13) of IGST Act, 2017 ). These are ex facie views of mine and the same should not be construed as professional advice / suggestion. - Reply By Kaustubh Karandikar - The Reply = Respected Amit ji thanks for your kind advice. My views on the same are given herein below: The tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction fits in to the definition of Intermediary Services . As per Section 13(8)(b) of IGST Act, 2017 , the place of supply in case of Intermediary Services shall be the location of the supplier of services. Since in the given transaction, location of the supplier of services is in India, it will not be treated as export of service and therefore, will be liable to pay GST. Sir, y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our kind views please - Reply By Amit Agrawal - The Reply = Dear Shri Kaustubh Karandikar Ji, As explained in my earlier post, I hold a view that subject services are not taxable under current GST, if subject services so provided by XYZ, are held as 'intermediary' services as defined u/s 2 (13) of IGST Act, 2017 ). Hence, XYZ is not liable to pay any gst there-against. This is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because, in my view, such services are neither inter-state supply u/s 7 nor intra-state supply u/s 8 of the IGST Act, 2017 when service-receiver (i.e. PQR) is located outside India. And any interpretation to make it as inter-state supply u/s 7 will in-turn make such provision unconstitutional to that extent. You may refer to my article on TMI - published on 29.01.2019 - having subject-l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine as: A view: Why Intermediary Service provided to recipient located outside India cannot fall under Inter-State Supply and Why IGST is not leviable there against? And alternatively, why such provision treating it as Inter-State Supply will be unconstitutional? Real question (i.e. if subject services, provided by XYZ, are held as 'intermediary' services as defined u/s 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (13) of IGST Act, 2017 and hence, if same is held as taxable under GST laws) is, to my mind, which tax XYZ should pay (whether CGST SGST or IGST) thereagainst? Ultimately, all these issues are very complex in nature which are open for different interpretations to my mind. And various question/s of law involved here, will be eventually settled - one way or other - by Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of India. These are ex facie views of mine and the same should not be construed as professional advice / suggestion. - Reply By Amit Agrawal - The Reply = Link to above said article: https://www.taxmanagementindia.com/visitor/detail_article.asp?ArticleID=8346 - Reply By Kaustubh Karandikar - The Reply = Respected Amit ji Your article is an eye opener and really a food for thought. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thanks for sharing. - Export of service - Query Started By: - Kaustubh Karandikar Dated:- 13-1-2023 Goods and Services Tax - GST - Got 5 Replies - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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