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TMI Blog2019 (3) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / MGST Act would be mentioned as being under the "GST Act". 02. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus- I. STATEMENT OF FACTS : Brief of Indian Company NES Global Specialist Engineering Services Private Limited (NES India) has its registered office is situated at office no 24 & 28, Red Bricks - Level 1, HDIL Kaledonia, Sahar Road, Andheri East, Mumbai -400069, Maharashtra, India. The Company is engaged in providing supply of man-power services to highly technical industries such as Oil and Gas, Power, etc. GST Regn number:- 27AACCN9033F1ZI & C1N :- U72200MH2008FTC288230 Brief of Abu Dhabi Company NES Global Talent Recruitment Services (NES Abu Dhabi) whose registered office is situated at Unit 104, Business Avenue Tower, A1 Salaam Street, P.O. Box no 63107, Abu Dhabi. Foreign Tax Identifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed with you, already and the same be considered as MSA, for all purposes, and request to waive the variation in Nomenclature, if any. 2. Further we are enclosing copy of Invoices - (Exb- 1) & Bank Statement - Supporting for realisation, (Exb- 2) and Advice of Foreign Inward Remittance- HSBC (Advice), (Exhibit- 3). 3. Further we submit that the above proceeds are received in fully convertible foreign exchange and the fact had been confirmed by the Bank in the Advice, as reproduced below for the sake of brevity.- "* In case where foreign currency amount has been mentioned as "INR" in the advice, it is being confirmed that the bank has received the funds in "INR" to the debit of Vostro account and that such proceeds are received in fully convertible foreign exchange". Based on the above fact, we reiterate that the above transaction to be considered as Export of Service, as the following conditions fulfilled.- (i) the supplier, (NES India), of service is located in India; (ii) the recipient, (NES Abu Dhabi), of service is located outside India; (iii) the place of supply of service is outside India, (Location of the recipient); (iv) the payment for such service has been receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of services is located in India. (ii) the recipient of service i.e. NES Abu Dhabi is located outside India and is registered at Abu Dhabi; As per MSA, NES Abu Dhabi will list of services (example given above) that it needs NES India to provide in respect of its office and business in Abu Dhabi, which indicates that recipient of services is located in Abu Dhabi. (iii) the place of supply of service is outside India in terms of Section 13(2) of the IGST Act; Section 13(1) of the IGST Act is to be referred to, to determine the Place of supply of services provided, in a situation where the location of the supplier of services or the location of the recipient of services is outside India. Hence, as the location of recipient of service i.e. NES Abu Dhabi, is outside India, the place of supply will be determined based on Section 13 of the IGST Act. In view of the above and as per section 13(2) of the IGST Act, the Place of supply for services provided by NES India is the location of the recipient of services i.e. in Abu Dhabi and the services provided by NES India is not covered by the specific situations covered by sections 13(3) to (13) of the IGST Act 2017. Section 13(1) and 13( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kaledonia Sahar Road, Andheri (East), Mumbai 400069 (GSTIN: 27AACCN9033F1ZI) (here in after referred to as 'the applicant') has filed above application under Section 98 of the Central Goods and Service Tax Act, 2017 read with Rule 104 (1) of the CGST Rules, 2017 seeking advance ruling on:- (i) Whether the transaction in question is a Zero Rated Supply or a Normal Supply under the GST Act? (ii) if the said supply is a Zero Rated Supply, then can the same be considered as an export of service under the GS T Act? 2. In point No.15 of the application regarding statement of relevant facts having a bearing on the question(s) raised, the applicant has stated the following are as under: NES Global Specialist Engineering Services Private Limited (NES India) has its registered office is situated at office no 24 & 28, Red Bricks - Level 1, HDIL Kaledonia, Sahar Road, Andheri East, Mumbai -400069, Maharashtra, India. The Company is engaged in providing supply of man-power services to highly technical industries such as Oil and Gas Power, etc. GST Registration number: 27AACCN9033F1ZI. CIN :- U72200MH2008FTC288230. Brief of Abu Dhabi Company NES Global Talent Recruitment Services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export of services" as defined in Section 2(6) of the said act, then such a transaction will be treated as an export of service and qualify as a Zero Rated Supply as per section 16(1) of the Act. Section 2(6) of the IGST Act defines "Export of Services", as follows "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 The applicant mentioned that they fulfil all the conditions. FINDINGS 5. The basic issue to be decided in the application is to:- (i) Whether the transaction in question is a Zero Rated Supply or a Normal Supply under the GST Act? (ii) If the said supply is a Zero Rated Supply, then can the same be considered as an export of service under the GST Act? 6. The applicant in Point No.15 of the application have stated that NES ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and NES Abu Dhabi as to why they are not merely establishment of distinct persons etc. The Annexure-A to draft Intercompany Services Agreement ("ISA") mentions the following Services:- 1. Purchases, Invoice Bookings for various Costs such as Visa, Immigration, labour cancellation charges, Medical expenses of various contractors of NES Abu Dhabi. 2. Invoices booking for all overheads. 3. Creating Invoices to various clients. 4. Booking Expenses of Contractors. 5. Bank-Reconciliation of all Bank accounts. 6. Vendor Reconciliation for all Vendors. 7. Cash Receipt entries posting. 8. Bank Payment entries posting, 9. AR reporting: 10. Payroll Assistance. 11. Support Assignment work. 12. Scanning and storing the data in the shared folder of NES Abu Dhabi. 13. General Consultancy Services provided for Accounting, Payroll, Taxation etc., and any other work which would require to do as per the request. The above details does not mention how each services will be provided, and what are the end to end transactions or details of each services, mode of payment, currency of payment, the place of provision of service, the place of recipient of service, the place of provider of serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mode of payment, currency of payment, the place of provision of service, the place of recipient of service, the place of provider of services, the relationship of NES India and NES Abu Dhabi as to why they are not merely establishment of distinct persons etc. 3) During the previous personal hearing the Bench had asked the applicant to provide the details of end to end transactions and to handover supportive documents to the department. However, the applicant has submitted only a copy of intercompany service agreement, Month wise, cost sheet of invoice amount for the period 2017-18, offer letter of employees issued by NES Global Talent for working in Mumbai of office, details of Directors (Key personnel), and sharing pattern of NES India Abu Dhabi. Registration Certificate of NES Global Talent Abu Dhabi and citation of Delhi High Court decision in respect of W.P.(C) No. 11569/2016, W.P.(C)11572/2016, W.P.(C) No.11575/2016 and C.M. No. 45598/2016, W.P.(c) No. 11577/2016 1.r.o. M/s. Verizon Communication India Pvt. Ltd. = 2017 (9) TMI 632 - DELHI HIGH COURT 3.1) It may be seen that applicant has not provided the information about end to end transactions as detailed at para No.2.1 ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices. In absence of full disclosure/information, if we indicate it is an export of services, ITC benefits, refund and other unknown implications may wrongly arise. Since, the above mentioned details/information are not provided, this office is not in a position to reply to below questions of the applicant. QUESTION & PRAYER Considering the facts discussed in foregoing paragraphs, the question framed by the applicant in Point No.14, (i) Whether the transaction in question is a Zero Rated Supply or a Normal Supply under the GST Act? the answer is since the applicant failed to provide the Master Services Agreement ("MSA") and not specifying how each of the services mentioned in the Intercompany Services Agreement ("ISA"), will be provided, and what are the end to end transactions or details of each services, mode of payment, currency of payment, the place of provision of service, the place of recipient of service, the place of provider of services, it is prayed that the application may be rejected at this stage. The applicant has also failed submit the complete details as to how they fulfil the requirements of Section 2(6). (ii) If the said supply is a Zero Rated Supply, then ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 30th April, 2017. The services to be provided by the applicant to the client as per the MSA would be as under:- 1. Purchase Invoice Bookings for various Costs such as Visa, Immigration, labour cancellation charges, Medical expenses of various contractors of NES Abu Dhabi. 2. Invoices Booking for all overheads. 3. Creating Invoices to various clients. 4. Booking Expenses of Contractors. 5. Bank Reconciliation of all Bank accounts. 6. Vendor Reconciliation for all Vendors. 7. Cash Receipt entries posting. 8. Bank Payment entries posting, 9. AR reporting: 10. Payroll Assistance. 11. Support Assignment work. 12. Scanning and storing the data in the shared folder of NES Abu Dhabi. 13. General Consultancy Services provided for Accounting, Payroll, Taxation etc., and any other work which would require to do as per the request. 2). The relevant portion of the agreement is reproduced as below for the sake of clarity of activities & transactions undertaken by the applicant whether it comes under term "EXPORT" and "Zero rated supply" of GST Act to answer the questions asked in this application. 1. This Intercompany Services Agreement (this "Agreement") together with various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 2 in section 8. In the present matter, we find from the agreement that applicant located in India is supplying to their client located abroad. The applicant submitted that the payment for such service has been received by the supplier of service in convertible foreign exchange, and for that copies of invoices, BRC and Bank statements are submitted on record which proves that the payment received is in convertible foreign exchange. We further find from the information submitted on record that both the Applicant and their client are not establishments of the same person, even though they are group companies. The Shareholding pattern of both the companies proves that the Key management personal and Board of Directors are different and neither of them holds shares of each other and thus they do not control one another. The applicant is not a branch or an agency or a representational office of the client and both the companies are independent of each ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow, 16. (1) "zero rated supply" means any of the following supplies of goods or services or both, namely:- (a) export of goods or services or both; or .............................................. From the above provision we find that the "zero rated supply" means (a) the export of goods or services or both, and (b) ................................... In the present case, we are of the opinion that the applicant is an exporter of services under GST Act and the supply of services in the subject case as covered by the MSA agreement submitted it is very clear that the said transactions are covered under "Zero rated supply 05. In view of the extensive deliberations as held hereinabove, we pass an order as follows : ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) NO.GST-ARA- 52/2018-19/B-160, Mumbai, dt. 19.12.2018 For reasons as discussed in the body of the order, the questions are answered thus- Question:- Whether the transaction in question is a Zero Rated Supply or a Normal Supply under the GST ACT? Answer:- In view of the discussions we hold that the transaction covered under the MSA dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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