Export of service ,GST Registration, Goods and Services Tax - GST

[Dilip Sanghvi]

I am a content writer for a client in US.
I write Content for them in word file and they publish it on their website/blog.I get paid in USD.

Whether this will be zero-rated supply? or OIDAR?

And considering this as zero rated if possible then We need not take gst registration till 20 lacs

As interstate supply of services was exempted till 20 lacs

Changed from Oct 2017

Thanks in Advance to experts

Posts / Replies

[Shilpi Jain]

This will not be an oidar since content writing involves human intervention.

It will be an export of service. For service providers Inter state supply will not attract registration requirement upto 20lacs.

However see if u would want to take IEC code just in case you would be eligible for SEIS benefit whenever clarity is received In this regard.

[KASTURI SETHI]

I agree with Madam Shilpi Jain.

Although exports are tax-free, yet the value of exports are to be included in the aggregate turnover for computing threshold limits for the purpose of registration.

[Alkesh Jani]

Shri

As per the query, of course the activity is taxable and it is zero rated supply. However, in terms of Section 7(5) (a) of IGST Act, the activity may be treated as "Inter-state" Supply. Further, in terms of Section 24(i) of CGST Act, the registration is compulsory, without taking into account the threshold limit.

Based on above, I am of the view that registration may be taken and proper information may be declared in GSTR-1 to avoid any dispute, which may arise in future.

Thanks

[Dilip Sanghvi]

Respected Alkesh Sir,

Please consider the below information also and let us know if there is any change of opinion

Exemption from compulsory GST registration even making interstate supply :-

(a) A person making inter-state supply of services is not required to register under GST if his aggregate turnover is less than ₹ 20/10 lakhs. Notification No. 10/2017-IT dated 13-10-17)

[KASTURI SETHI]

It is not the issue of inter-State supply. It is the issue of inclusion of value of service exported into aggregate turnover for arriving at threshold exemption limit and hence obtaining registration. Law is as clear as sunshine. Value of export of service cannot be excluded from the aggregate turnover in this scenario.

[Dilip Sanghvi]

Can we make this conclusion:

1. Export to be included in counting 20 lacs : YES

2. Export is inter state supply : YES

3. Whether compulsory registration required for export considering it as inter state supply of service till 20 lacs:

NO as per Notification No. 10/2017- Integrated Tax dated 13/10/2017.

[Alkesh Jani]

Shri Dilipji,

Please go through the reply given by me above. The issue is to be treated more practically rather than technically. As the content writer you will be receiving the consideration in USD and it may be an ongoing process. Hence, there will be no declaration, which may lead for dispute. As we are aware that now-a-days GSTR-3B is also the part of Form 26AS of Income tax. So it is safer side to take the registration and declare it is in GSTR-1 and GSTR-3B accordingly.

Now coming to technical side, the Section 24 of CGST Act starts with "Notwithstanding" means having overriding effect. For rest of the part, I agree with the views expressed by our expert shri Kasturiji Sir.

Thanks

[KASTURI SETHI]

Sh.Alkesh Jani Ji,

Read your views today. Keeping in your views (not agreeing with ALL views) , will you please clarify what is the purpose of issuance of Notification No.10/17-IT dated 13.10.17 ? Pl. clarify with examples.

[KASTURI SETHI]

Sh.Dilip Sanghvi Ji,

Pl. refer to your cross query at serial no. 6 dated 6.9.21 above.

Yes. We can draw conclusion as opined by you. Your interpretation, analysis and conclusion on this issue are absolutely correct de jure.

[Alkesh Jani]

Shri Kasturiji Sir,

The clarification sought by you is as follows:-

First the IGST Act is for determining the place of supply and levy of CGST+SGST or IGST. The taxable supplies are to be treated accordingly, for better understanding “inter-state” supply can be bifurcated in two ways

(1) inter-state supply by way of supply between one state or union territory to another or supply to SEZ unit or developer and

(2) Export of goods and/or services and Import of goods and/or services.

The IGST Act is applicable to whole of India, which is the case at (1) above.

At (2), Export means taking out of India and in case of Import bring in India. So for the purpose of levy, it will be treated as “Inter-state” although it is activity from India to another country or from another country to India.

The Export /Import of goods or services is inter-state supply is for the purpose of levy of IGST, it is an indicative.

Further, the purpose of extending exemption as specified person making taxable supply of services are exempted from registration is within India (NOT from or to another country). In other words, exemption is extended to “Inter-state” supply of service (1) above and not for “Export/Import of Services”.Moreover, the term “Export of goods and Export of service” are defined in IGST Act, therefore, department may dispute that exemption vide above notification is not applicable to “Export of Service”.

Further, as per rule of interpretation, Wherever, it is possible to do so, the provision must be harmoniously constructed by avoiding a conflict. In simple words, interpretation is to made in such a manner so as to harmonized with other provisions and not to struck down the other provisions. If interpretation is given effect so as to exempt inter-state supplies (including Export/Import), it will struck down the purpose of Section 24 of CGST Act.

The exemption granted by the Notification No.10/2017-IGST is for the “Inter-state” supply of services. The example can be supply of service of repair of plant and machinery by a person to another person in another state(s).

In summarising above, the intention of the Notification is to grant exemption to small service providers within India.

As per the query, the practical problem which may arises is, as the amount is received in USD and no documentary proof of receipt for the purpose of business will be available by an Individual, not only GST point of view but provisions other Act, relating to receipt of foreign currency. If the person is registered with GST he may declare the same in GSTR-1 and GSTR-3B and Invoice may be issued and BRC or FIRC can be obtained for related transaction.

Taking into account all the above, view to take registration under GST was advised by me.

Sorry for replying late.

Thanks,

With due regards