TMI Blog2020 (10) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... upply. The statute is unambiguous in as much as it says, the person liable to pay the consideration for supply of services is the Recipient of such supply and Consideration is any payment made whether by the recipient or any other person for such supply. It is not disputed that the appellant is under contractual obligation to Doyen Systems to provide services through Doyen Systems for which Payment is agreed to be made by Doyen Systems to the appellant after verifying the invoice and the client time-sheet as in the Contract Agreement. Further as observed by the lower Authority the payment of Consideration to the appellant is entirely with the Doyen Systems and the appellant cannot claim consideration directly with the client of Doyen Systems or the client of Doyen Systems is not the person liable to pay the appellant for the services supplied by the appellant. Thus, it is clearly evident that the recipient of Services of the appellant is Doyen Systems. - TN/AAAR/02/2020(AR) - - - Dated:- 18-8-2020 - THIRU. G.V. KRISHNA RAO, AND THIRU. M.A. SIDDIQUE, MEMBER Preamble 1. In terms of Section 102 of the Central Goods Services Tax Act 2017/Tam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Order No. 20/AAR/2020 dated 24.04.2020 = 2020 (7) TMI 112 - AUTHORITY FOR ADVANCE RULING, TAMILNADU passed by the Tamilnadu State Authority for Advance ruling on the application for advance ruling filed by the appellant. 2. The appellant 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. The major services provided by him broadly include implementation, enhancement, support services and any other services that fall within the ambit of the Oracle Financials sphere. The services provided by him currently are covered under the SAC (Service Accounting Code) 998313. These services are being provided by him to both Indian and Foreign clients requesting the services. In Jan 2019, he has entered into a contract with a GST registered IT Company in India, M/s. Doyen Systems (hereinafter referred to as Principal or Doyen Systems ), providing similar Oracle services. As part of the Contract his role was that of a Consultant to provide support services to the Oracle ERP owned by the US client of Doyen Systems based out of Boston. The original contract is between the Principal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of appeal are as follows: Under para 7.1 of the order, the Hon ble Bench has held that the contract between Doyen Systems and the appellant did not specify which client. In this connection, the appellant referring to the contract has stated that the contract rate is the IRM new rate. IRM is the name of the client as well. Also, the invoices submitted by the appellant to Doyen Systems specifically mention the Consulting Fee is towards Oracle EBS IRM Support in the Particulars Column. This together bring out the fact that the services were meant for the US client, which in the present case is IRM. Under Para 7.2 of the order, the Hon ble bench admits that IRM is a client of Doyen Systems and goes on to state the contract is between Doyen Systems and the client and appellant are not privy to the main contract. The appellant has stated that it is an admitted fact that they are not privy to the main contract but the subcontract between Doyen Systems and the appellant emanates from the main contract. Without the main contract there is no question of the appellant being provided with this sub contract. So the appellant claims that the contention of AAR in para 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t default the appellant can lay claim only against the company and not against the foreign client does not hold true though such a scenario is not point of contention in this application From the above submissions, it is clear that though the contract is between the appellant and DSPL, the services were provided to and consumed by the client of DSPL who is based outside India. As stated, the services provided by the appellant is an individual skill based services and it can only be provided directly to the recipient. Further, the contract specifies that the payment is subject to approval of client timesheet which is good enough evidence to suggest that the services have been provided to the foreign client and that service is being validated by the client by approving the timesheet. Only for such approved timesheet the foreign client was releasing payment to DSPL In the light of the above submissions it is pertinent here to refer to the terms recipient and consideration as defined in the GST Act. From the definition of recipient, it emerges that there are two parts to the definition to fall under (a) as recipient - Supply of goods or services AND Payable of Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant claims that the skill-based services provided by him is ultimately consumed by the client of Doyen Systems for which he is paid by Doyen Systems who have contracted him is an export of services provided by the appellant while the Original authority has held that the appellant has a contract only with Doyen systems who pays the consideration to him, after verifying the time sheet of the appellant with their client and the services provided by the appellant are intra-state supply to Doyen Systems taxable to CGST/SGST. 8. We find that the contention is based on his following averments: GST is a destination based consumption tax. The skill-based service supplied by him is consumed by the client of Doyen Systems and therefore the recipient of his services are the client of Doyen Systems who is based outside India Section 2 (93) (a) of the GST Act which defines recipient has two parts to it, Supply of Goods or Services and Payable of Consideration ; Consideration envisaged in the GST Act is wide enough to include payment obligation which can be satisfied by any other person other than the actual recipient 9. The Statutory provisions relating to Recipien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation is payable. Section 2(31) of the Act defines Consideration as: (31) consideration in relation to the supply of goods or services or both includes- (a) any payment made or to be made, whether in money or otherwise, in respect of in response to, or for the inducement of the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; Thus, consideration in relation to a supply should include any payment made for such supply whether by the recipient or any other person. This definition states about what is to be the value/consideration for supply on which tax is liable to be paid. This definition do not speak or clarify on Recipient of supply but merely encompasses the elements of Consideration for a supply. 10. On a joint reading of both the definition, the statute is unambiguous in as much as it says, the person liable to pay the consideration for supply of services is the Recipient of such supply and Consideration is any payment made whether by the recipient or any other person for such supply. It is not disputed that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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