2019 (10) TMI 787 - AAR - GST

Taxability under GST - Rate of tax - marketing service provided by the application - export of services or not - intermediary services.

Whether the applicant is acting as an intermediary of McAfee Singapore? - HELD THAT:- The applicant is performing services to support and facilitate the selling, marketing and distribution of Products by the Company and other affiliates. Hence this is clearly in line with the definition of the term “Intermediary” who is a person who facilitates the supply of goods or services or both, between two or more persons.

Whether the services supplied by the applicant to McAfee Singapore is marketing services or intermediary services? - HELD THAT:- The exception clause in the definition states that the term “intermediary” does not include a person who supplies such goods or services or both or securities on his own account.” The applicant is not supplying the goods or services on his own account and the ultimate supply of goods or services is made by the parent company directly and hence the applicant is not covered under the exception clause as well. It is pertinent to note the use of words “such” and this relates to the supply of such goods or services which is facilitated by the applicant and not the services provided by him - It is clear from the above agreement the applicant is providing services to the foreign affiliates as an intermediary - thus, the business services of the intermediaries are covered under the SAC 998599.

Whether the services supplied qualifies as export of services and hence zero-rated? - HELD THAT:- The issues involved are verified and found there is no doubt that the applicant, i.e., the supplier of services is located in India, the recipient of service is located outside India and the consideration is received in convertible foreign exchange and also that the applicant and overseas entity are two separate legal entities as per the agreement. The only issue to be decided is whether the place of supply is outside India or not and this is outside the jurisdiction of this authority. Unless this is decided, there is no question of determining whether the transaction is that of export of services or inter-State supply of services. Hence this authority cannot give a ruling on this issue.