TMI Blog2018 (7) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeds ahead with examination and consideration of this fact, discussions and findings on the aspect of “place of supply” will be inevitable - where a question also involves examination of “place of supply” (which is not among the issues which can be decided by AAR], the question cannot be taken up by the authority for lack of jurisdiction. Whether Esprit India is eligible for seeking refund of GST for the taxes paid on input services or goods or both? - Jurisdiction - Held that:- It is dependent upon the fulfillment of conditions as prescribed under Section 2(6) and Section 16(1), both of the Integrated Goods and Services Tax, 2017. Such refund claims merit to be examined in terms of provisions of Section 54 of the CGST/HGST Act, 2017 and rules made thereunder. The proper officer under the CGST/HGST Act, 2017 and roles made thereunder is the competent authority for the same - However, with regard to giving Advance Ruling on this question, it is observed that as the earlier question relating to export of services is dependent upon the definition of “place of supply”, which is out of jurisdiction of the authority, this instant question too, being corollary to earlier question, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Germany. 2. Purchase of goods and trademark protection Esprit Germany directly purchases goods from Indian suppliers Esprit India performs its functions as a sub-sourcing contractor of and does not purchase the goods or trade its own name. It assists in protection of trademark which includes ensuring that suppliers execute all trademark confirmation letters, comply with the trademark protection procedures and comply with the sourcing principles as adopted by Esprit Germany/EDCFE. 3. Identification of supplier EDCFE provide guidelines and instructions to Esprit India regarding vendor selection process Esprit India responsible for collecting data for the purpose of vendor evaluation, Esprit India undertakes vendor evaluation on various parameters including experience, reputation, quality of product, price etc. based on which the vendor is selected. Esprit India is also responsible for maintaining the existing and new supplier base in India. 4. Negotiation with the suppliers Esprit Germany d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Attorney Holder, M/s. Esprit India Pvt. Ltd. He reiterated the submissions made in their application for advance ruling after detailed discussions, the decision was reserved which is being released today. DISCUSSION AND FINDINGS OF THE AUTHORITY 6. As regards the taxability of taxability of above staked services provided by Esprit India to ITS associate concern in Hong Kong EDCFE under GST regime, it is observed that as per as per Explanatory Notes to the Scheme of Classification of Services read with Notification No. 11/2017-Central Tax (Rate) dt. 28/07/2017 (as amended), the services enumerated by the applicant in tabular form as given above, qualify as taxable services, in the following manner and chargeable to GST under forward charge. S.No. Functions/Activities Role of EDGE/Esprit Germany Role of Esprit India SAC Description Taxability 1. Market research No role Esprit India conducts market research to understand market dynamics, gather pricing information from different suppliers and ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of goods sourced from India. Esprit India only communicates the terms and conditions to the extent of instructions and requirements received from Esprit Germany {through EDCEF) but is not involved in negotiation. 998599 Other support services n.e.c. Business service of intermediaries and brokers; Taxable under forward charge @ 18% [S.No. 23(ii) of Notification No. 11/2017-Central Tax (Rate) dt. 28.07.2017] 5. Inspection quality control Esprit Germany and DCFE, frame guidelines for quality control procedure to be adopted during manufacturing, stock keeping in warehouse and transportation Esprit India based on the guidelines received from EDCFE conducts quality checks at various to stages of production, it also checks whether the goods meet the specification, quality, delivery time, and other requirement of Esprit Germany. 998311 Management consulting and management services including financial, strategic, human resources, marketing, operations and supply chain management This service code also includes Products development, quality assura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 54 of the Central Goods and Services Tax Act or the rules made thereunder. Further, as per Section 2(6) of the IGST Act, 2017, export of services is defined as under: 2 (6) export of services means the supply of any service when- (i) the supplier of service is located in India; (ii) the recipient of service Is located outside India; (iii) the place of supply of service is outside, india; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; From the above, it is evident that whether a transaction is export of services or not, is dependent upon the tact as to whether the place of supply of service is out of India or not. Consequently, if the advance ruling authority proceeds ahead with examination and consideration of this fact, discussions and findings on the aspect of place of supply will be inevitable. Whereas, Section 97(2) of the CGST/HGST Act, 2017 empowers the Advance Riding Authority to decide the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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