Home Case Index All Cases GST GST + AAAR GST - 2023 (6) TMI AAAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (6) TMI 777 - APPELLATE AUTHORITY FOR ADVANCE RULING, MAHARASHTRAValuation of supply - Consideration for supply - Incentive received from “Intel inside US LLC” under Intel Approved Component Supplier Program (IACSP) - export of service or not - HELD THAT:- To qualify as a trade discount the three conditions should be satisfied that the buyer and the supplier have entered into an agreement which is not the case at present, as the incentive is being directly received from IIUL and agreement exists between the manufacturer and the supplier only and not with the distributor. Secondly, the incentive received is not directly linked to a specific invoice rather than the volume of sale undertaken by the authorized distributor of IIUL. Thirdly, there is no such reversal done by the Intel Authorized Distributors in the present case in relation to the goods supplied to the appellant. The wordings of Section 15(3)(b)(i) very clearly states that discount should be established in terms of the agreement entered into or at or before the time of such supply between the buyer and the supplier. Here the only agreement that is available on record is the agreement between IIUL and the appellant. Trade Discount or not - HELD THAT:- The appellant has not come up with any additional facts rather than saying plainly that the incentive received by them are in the form of trade discount. MAAR has rightly observed that no sale transaction of goods has taken place between the appellant and hence incentives will not be covered under the provisions of Section 15(3) of CGST Act, 2017. For the incentives to qualify as trade discount, an agreement between seller and purchasing party is a pre-requisite, the same is missing between the distributor and the appellant. Thus, the incentive received from the manufacturer is separate from the transaction undertaken by the appellant with the distributors. If incentives received by them are not considered as trade discounts, then whether it is consideration of any supply? - HELD THAT:- It is evident from the contract / agreement between appellant and IIUL that the amount received under scheme is to enhance supply, to emboss Intel brand in India and to keep customer base intact in INDIA and thus implied services are performed by appellant as per the outcome based contract. It can be conclusively held that the appellant is bound by the agreement to perform the following tasks:- (i) They will make their best efforts to sell and market the Intel products (ii) Assist Intel in implementing Intel’s marketing campaigns (iii) Provide first-level technical product support. In lieu of the aforesaid services, the payout is being accrued to the appellant and not in the form of trade discount as claimed by them but in the form of supply of marketing as well as technical support services. Whether the supply would fulfill the condition of export of service? - HELD THAT:- In the present case, the marketing services are provided in respect of goods which are made physically available by the recipient of services (i.e. IIUL through its distributors) to the supplier of marketing services (i.e. the appellant), in order to provide the services. Therefore, as per Section 13(3)(a), the place of provision of service is the location of the supplier of services i.e. the applicant, which is in India. Hence, the impugned supply does not qualify as export of services.
|