TMI Blog2020 (7) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... R/2020 - - - Dated:- 24-4-2020 - MS. MANASA GANGOTRI KATA, I.R.S., AND THIRU KURINJI SELVAAN V.S., M.SC., (AGRI.), M.B.A., MEMBER, Note : Any Appeal against the Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. Shri. Rajesh Rama Varma, Tower-5, 403 Sky Dugar, Rajankuppam Road, Chennai, TamilNadu 600 095. (hereinafter referred to as Applicant ) is a sole proprietory concern registered under GST Act with GSTIN: 33ABAPV7712P1Z7. The Applicant has preferred an application seeking Advance Ruling on the following Question: a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he invoice by him on the Principal. The contract is currently in force and valid till December 2021. 2.2 As part of the service obligation on the contract he was required to undertake the following activities on a monthly basis. Provide the support services directly to the US client from the office premises of the Principal Timesheet on the hrs. worked during the month to be provided monthly to enable billing the US client The details of the time sheet so provided was consolidated with the timesheet provided by the other employees of the Principal working on the project and an invoice was raised in USD on the foreign client. The Principal was availing the benefit of Export of services and filings claim accordingly writh the GST authorities. At the end of the month he was provided with the Billing in USD and equivalent INR value by the Finance department of the Principal, based on which he used to raise invoice on the Principal in INR terms with GST @18% (9% CGT + SGST@9%) separately. Post submission of the GST invoice at the scheduled date GST Return for tax payment and return were filed by him. 2.3 The applicant has further stated that as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ange Management Act it is provided that if the payment in India rupees is received in India through banking channel it is deemed to be convertible foreign exchange. In the present case the Principal is claiming export of services and a part of the services is being provided by the applicant directly to the foreign client. The payment is received by the principal in USD from the foreign client. The contract between the applicant and the Principal is in USD , but payment is made to me INR. The applicant has relied on the following case laws passed by CESTAT on similar issues in the erstwhile Service Tax Act where the question of inward remittance for export proceeds in INR was dwelled at length and decided to be treated as receipt of payment in convertible foreign exchanges. 1. National Engineering Industries Ltd. Vs Commissioner of Central Excise, Jaipur (CESTAT Delhi)- CESTAT (815) CESTAT Delhi (278)- Final Order No. ST/456 of 2011 = 2011 (9) TMI 759 - CESTAT, NEW DELHI . 2. M/s. Support.com India Pvt. Ltd. v/s The Commissioner of Service Tax Commissionerate-II (Bangalore)-ST/20175 to 20184/2017-SM; ST/ 20914/ 2016 = 2017 (6) TMI 1109 - CESTAT BANGALORE . 3.1 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh LOCAL COMPANY. LOCAL COMPANY on its part provides him the details of the USD amount due to him as part of the billing process which indicates a one to one relationship between the discharges of the dues by the foreign client in USD for his services. Such a scenario is also envisaged in the definition of consideration detailed above under the GST Act when it states under the definition of consideration that the payment can be discharged by the recipient or by any other person. In the present case, the payment is due from the US client and remitted to LOCAL COMPANY and LOCAL COMPANY in turn remits the amount to me in INR. Since the payment from US client is received in USD into the account of LOCAL COMPANY the conditions provided under 6(iv) is satisfied. 4. The applicant is under the administrative control of State and the State Tax Officer vide letter RC.40/2020/A3 dated 07.02.2020 has furnished the comments on the application filed by the applicant. The said authority has reported that no Show Cause Notice/or Adjudication on the issues raised is pending with them. Also, the State tax officer has opined that the service provided by the applicant would be an intrastate supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. The Act limits the Advance Ruling Authority to decide the issues earmarked for it under Section 97(2) and no other issue can be decided by the Advance Ruling Authority. Of the above questions on which ruling is sought by the applicant, the question SI. No. 2 is alone covered under Section 97(2) above. This position was explained during the personal hearing also. The applicant during the hearing has requested a ruling to determine the application on the question of GST liability on the services he provides and the same is taken up for consideration. 7.1 We have carefully considered the various submissions made by the applicant, the comments offered by the Central Tax Authority and the State Tax Authority... The applicant has stated that he is engaged in the business of providing IT software related consulting services in the area of Oracle ERP w.r.t Oracle Financials. It is seen from the Contract between the applicant and Doyen systems Private Limited., that Doyen is a provider of software services in Oracle domain. Doyen has entered into agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly of goods or services or both, the person who is liable to pay that consideration; (b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and (c) where no consideration is payable for the supply of a service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied. In terms of section 2 (5) of the CGST/TNGST Acts, (5) agent means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another;. In the instant case, as already brought out, there are two sets of contracts, one between Doyen Systems and its clients providing for software support services to be rendered by them and the other between Doyen Sy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the services provided to Doyen by the applicant. Section 7 of CGST/TNGST Act states: 7.(1) for the purposes of this Act, the expression supply includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (b) import of services for a consideration whether or not in the course or furtherance of business; and (c) the activities specified in Schedule l, made or agreed to be made without a consideration; (1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.; Schedule II states: 5. Supply of services The following shall be treated as supply of services, namely:- (d) development, design, programming, customization, adaptation, up gradation, enhancement, implementation of information technology software: In the instant case, the applicant provides IT software related consulting services in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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