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TMI Blog2024 (11) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... vices, Sapthagiri, Thipadapuram Hill, Kulathoor P.O, Trivandrum (hereinafter referred to as the Applicant) is a taxpayer registered under the GST Act, engaged as an agent of foreign companies for promoting products used in tire and rubber industry. 2. In this ruling, a reference hereinafter to the provisions of the CGST Act, Rules and the notifications issued there under shall include a reference to the corresponding provisions of the KSGST Act, Rules and the notifications issued there under. 3. Applicant requested advance ruling on whether GST is applicable on the revenue paid to them by their principals outside India. 4. The contentions of the applicant: 4.1. The applicant submits that they are representing foreign companies-Ektrontek-Taiwan, H.W. Wallace Co.-England, Alfa Mirage-Japan and Barwell-England for promoting their products used in tyre and rubber industry in the markets of India and Srilanka. In addition to the promotion of the products supplied by the foreign companies, the applicant provides installation and subsequent services based on the pre-agreement between them. The applicant requested clarification on liability of tax under the cases of providing promotion and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its that, in this case, their principal suppliers pay commission to the applicant in foreign currency for sales and installation activities done in a place outside India through their authorised engineers. The service provider and recipient are located outside India and hence these transaction to be considered as export services to the customer from India. 5. Comments of the Jurisdictional Officer: The application was forwarded to the Superintendent, Central GST and Central Excise, Kazhakootam Range as per provisions of Section 98 (1) of the CGST Act. The officer submitted that the services provided by the applicant under agreements to various foreign suppliers are in the nature of intermediary services and that the services provided by the applicant in both cases cannot be treated as export of services as defined in Section 2 (6) of the IGST Act, 2017 for the reason that the condition (iii) in the definition that the place of supply of service is outside India is not satisfied as in terms of Section 13 (8) (b) of the IGST Act, 2017. Therefore the place of supply of services provided by the applicant to the customers in India and Srilanka for the foreign suppliers is to be treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant is that of installation of machinery/goods supplied by the principal to various customers in India and Sri Lanka. For such installation work, the applicant claims that they are separately paid by the principal. We are of the opinion that this is a service classifiable under Service Code Heading 9987 [Maintenance, repair and installation (except construction) services]. The activity involved is to install the machinery supplied by the overseas principal to customs in India and Sri Lanka, on behalf of the principal. 7.3. As per Section 2 (6) of the IGST Act, 2017, Export of services means the supply of any services when- (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange [or in Indian rupees wherever permitted by the Reserve Bank of India]; and are not merely (v) the supplier of service and the recipient of service establishments of a distinct person in accordance with Explanation 1 in section 8; 7.4. In the instant case, there is no doubt that the suppli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IGST Act, 2017, (3) The place of supply of the following services shall be the location where the services are actually performed, namely:- (a) Services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services: 7.9. Therefore, when the machines are installed in India, the activity does not constitute export since the machine has to be made physically available in India and therefore, the place of provision of service is in India. However, when the machines are installed in Sri Lanka, the place of provision is outside India and this particular situation; the supply would tantamount to export and same would be done either on payment of IGST or without IGST on the strength of a letter of undertaking. However, in cases where applicant receives the consideration in Indian currency, or if the applicant and the recipient of service are merely establishments of a distinct person in accordance with Explanation 1 in section 8 of the IGST Act, the same will not amount to export. 7.10. The above discussions are summed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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