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2020 (8) TMI 516 - AAAR - GSTClassification of Services - Management services - intermediary services or not - reimbursement of expenses - requirement of registration under GST - liability of Mr. Santosh to pay tax on the services rendered by him to H-J Family of Companies - time and value of the supply of services - only grievance of the Appellant is regarding the finding by the lower Authority that the management services are being provided in the capacity of an `intermediary’ as defined in Section 2(13) of the IGST Act - challenge to AAR decision. HELD THAT:- The nature of the transactions of the Appellant as explained by him in his appeal is examined. It is seen that the Appellant is appointed as an “Independent Regional Sales Manager for the Middle East and Indian Markets” by the H-J Family of Companies, a company engaged in the business of manufacturing and selling various categories of distribution transformer components and accessories. The Appellant is required to make a presentation of the products offered by the H-J Family of Companies. The latter specifies the presentation and the technical details of the said products. The Appellant reports to a Sales Manager based in the office of H-J Family of Companies in Europe and furnishes a report on the status of the sales development (with customers in the Middle East and Indian markets). The Appellant does not conclude contracts between H-J Family of Companies and the final customer and does not directly receive or deal with the products of H-J Family of Companies in any manner. It is also seen that the customers enter into contracts directly with H-J Family of Companies - When we apply the general understanding of the term ‘arranging’ or ‘facilitation’ to the instant case, the Appellant facilitates the sale of the products of H-J Family of Companies by undertaking sales presentations to the prospective customers in the Middle East and India. It must be appreciated that devoid of the product, there is no purpose in the sales presentations made by the Appellant. It is only with the sole intention of facilitating the sales of the product of the principal i.e H-J Family of Companies that the Appellant provides the service. There does not seem to be any difference between the meaning of the term “intermediary” under the GST regime and pre-GST regime. In the pre-GST regime, an intermediary referred to a person who facilitates the provision of a main service between two or more person but did not include a person who provided the main service on his account. Similarly, in the GST regime, an intermediary refers to a person who facilitates the supply of goods or services or both between two or more persons but excludes a person who supplies such goods or services or both on his own account - The service of facilitating a supply of goods between the Principal and the customers is provided by the Appellant to the overseas client (H-J family of Companies). The Appellant is not supplying such goods on his own account. The decision of the AAR is upheld that the service of sales presentations of the products of H-J Family of Companies is classifiable as “Other professional, technical and business services” under Service Code 9983.11 and the same is being rendered as an ‘intermediary service’ as defined under Section 2(13) of the IGST Act - appeal dismissed.
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