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2021 (12) TMI 117 - AAAR - GSTLevy of IGST - supply of service of installation/up-gradation & training - principal-agent relationship - Composite supply of services - naturally bundled services or not - specified transaction of the Applicant is to be reckoned as being provided to SPA or to the customers of SPA located in India - intermediary Services - HELD THAT:- A composite supply would mean a supply consisting of two or more taxable supplies of goods or services or both or any combination thereof which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. The consideration agreed with SPA is based on hourly rate for activities such as travelling, regular work or overtime hours and based on the time spent for each of the activities. Accordingly, they are providing more than two services i.e. installation or up-gradation of service, training to the customer for the operation of machine and other activities like overtime service. The contention of the appellant that charges for travelling, working hours or overtime are not separate activities and these are the benchmarks or methodology based on which consideration for actual service such as installation / up-gradation of machine or training in respect of machines would be determined but appellant have not put forth any argument how the travelling hours, working hours or overtime are not separate activities - The appellant may received the one consolidated charges for their service provided to customer considering it as one supply and not more than one. However, in the contract held between appellant and SPA hourly rate is fixed for each work i.e. working hours, travelling hours and overtime hours. Therefore, the appellant is providing more than two services and contention of the appellant that they are providing only one service is not correct. Indian customer as service recipient for the present transaction - HELD THAT:- A reading of the definitions given in Section 2(93) and 2(31) of the CGST Act, indicates that the person who is required to make a payment for getting a job done is the recipient of service. Accordingly, the recipients of the service supplied by the appellant will be the manufacturer as it is at their behest that the appellant has undertaken the activity of installation/up-gradation of the machine, service of machines which are under service contract with SPA and machine which are under warranty period to the customer - there is force in their argument and in present case SPA is paying consideration to the appellant for the service provided to the Indian customer. Therefore, in present case SPA is recipient of supply of service in terms of the consideration paid to the appellant and not Indian customer. Qualification of Applicant to be an ‘intermediary’ - HELD THAT:- Since there is no performance of service by SPA and actual services are performed by the appellant itself they are outside the purview of the definition of ‘intermediary’. Further as per CBIC circular dated 20.09.2021 referred above, subcontracting of services whether a part or whole cannot be included within the purview of intermediary services. In the present case, SPA has sub-contracted the services like installation/ upgradion of machines sold by SPA, training at customer’s site etc. to the appellant. Such services would be provided by the appellant to SPA as part of sub-contract agreement, by providing services to the customers of SPA. The supply of service by the appellant where it has been subcontracted to it by the recipient will fall under the exclusion part of the definition of ‘intermediary’ as per the provisions of Section 2(13) of the IGST Act 2017. Non-qualification of the specified transaction as ‘export of service’ - HELD THAT:- SPG Prints B.V. holding and foreign company of Stovec Industries Ltd. (i.e. is appellant) are two separate legal person and are not merely establishments of distinct person in accordance with Explanation 1 in Section 8 of IGST Act - the appellant service is performance based as such the appellant can perform service only at SPA’s customer in India and not outside India. Application disposed off.
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