TMI Blog2020 (12) TMI 786X X X X Extracts X X X X X X X X Extracts X X X X ..... 017, defines online information and database access or retrieval services (OIDAR) as services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services..(vii) Online Gaming'' - This definition will answer the first question posed by the applicant i.e. e-goods (in this case online gaming) will be considered as services under the GST Laws. If they are goods, what is the HSN classification and if services, what is the service classification and rate of GST on its sale/ supply within state? - Whether they are exempted from GST? - If Not exempted, what is the rate of GST on supply? - HELD THAT:- The Code wise List of services finds mention in Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. In the subject case we find that the applicant is supplying online content services - the subject services i.e. online gaming falls under SAC 998439. All services covered under the Heading 9984 attract a GST rate of 18%. In what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods / services and therefore neither SGST CGST is leviable? Please clarify the same - HELD THAT:- The clause (e) of Section 97 (2) of the CGST Act, 2017 has got a very wide connotation and would cover all sorts of transactions, where the Advance Ruling on the questions related to the determination of the liability to pay tax can be sought by the Applicant - the applicant is supplying OIDAR services in the subject case and as per the provisions of Section 13 (12) of the IGST Act, in such cases, the place of supply of online information and database access or retrieval services shall be the location of the recipient of services, in this case the customer who is located abroad. In the subject case, the applicant has not provided details mentioned in the aforesaid seven non-contradictory conditions and therefore we are not able to come to any conclusion with respect to place of supply i.e whether the recipient in the subject case is in non-taxable territory or is deemed to be located in taxable territory. Also, the applicant did not attend online hearings scheduled on 10.11.2020 and 01.12.2020 and requested for adjournment. The first request for adjournment in respect of on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king an advance ruling in respect of the following questions. 1) Whether e-goods , as commercially known in the market, are goods as defined in the GST Acts or are they services as per GST Act? 2) If they are goods, what is the HSN classification and if services, what is the service classification and rate of GST on its sale/ supply within state? 3) Whether they are exempted from GST? 4) If Not exempted, what is the rate of GST on supply? 5) In what circumstances will IGST, under reverse charge, be applicable or whether it is applicable in the situation of procurement from foreign supplier and supply from out of India as discussed above? 6) If the customer is from India and paying the consideration in dollar, whether it will be allowed as exports or if not allowed as exports then whether GST is leviable? What is rate of SGST CGST or IGST? Under which HSN Code or SAC? 7) If customer pays for the e goods in Indian rupees and goods delivered through CLOUD located outside India whether SGST CGST or IGST leviable on such transactions? 8) In case where customer / buyer is from out of India and payment is done in dollar, accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atching to customers of the applicant. Customers visit the Website of the applicant online and make payments to the applicant, after which Digital Goods are then delivered by cloud server to customer by Email. Applicant has submitted that their Suppliers are located abroad and include New Gameway from China, PayproGlobal and MmoBay LLC from the USA. Suppliers are contacted by Email or Instant Message service. The Payments are received from customers using PayPal. 2.5 The purchase of these digital goods are made online by the applicant s customers. Once, payment is received, the merchant provides the customer with a digital item as an e-mail attachment or may provide a secure link where the item can be downloaded. 2.6 No invoice is raised for delivering digital said goods, which have limited life of say, a few days or weeks. Payments are done by applicant s customers on line. It is not a software sale and does not require license. There is no work involved at the site of the client. 2.7 Applicant has stated that: a) Digital goods/e-goods are not necessarily goods as commonly understood as defined in the GST Acts but they can at best be called as services. (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d electronically through email or are downloaded from the Internet. 5.3 In the subject case the e-goods, referred to by the applicant are online gaming , as stated by him during the course of Final Hearing. Section 2(17) of the IGST Act, 2017, defines online information and database access or retrieval services (OIDAR) as services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services such as,- ..(vii) online gaming. This definition will answer the first question posed by the applicant i.e. e-goods (in this case online gaming) will be considered as services under the GST Laws. 5.4 The next three questions are regarding classification of the above said services, and the rate of GST on such, if the same are not exempted. 5.4.1 The Code wise List of services finds mention in Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. In the subject case we find that the applicant is supplying online content servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any particular thing done by the applicant with respect 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. Hence, this part of the question cannot be answered, being out of the provisions of Section 97 (2) of the CGST Act, 2017. 5.5.2 We now take up the second part of the query i.e. whether GST under reverse charge is applicable in the situation of procurement from foreign supplier supply from out of India as in the subject case. 5.5.3 A perusal of the submissions made by the applicant reveals that Digital Goods are purchased by applicant from the suppliers based abroad. Such digital goods, in this case online gaming, are then s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not mentioned whether the said customer is located in India or abroad but since the applicant has mentioned that the payment is in Indian Rupees we assume that the customer is in India which is a taxable territory and since the applicant is also located in India, GST is leviable on such supply of services. 5.8 The applicant vide question nos. 8 has asked for a clarification as to whether their services are export of services, in case when customer / buyer is from out of India and payment is received in dollars, and therefore neither SGST CGST is leviable. 5.8.1 To decide this question, place of supply is required to be discussed. This authority in earlier instances has not been inclined to discuss issues pertaining to place of supply , relying on the decisions made by the Appellate Authority of Advance Ruling (AAAR), Maharashtra State in the case of M/s. NES Global Specialist Engineering Services Pvt. Ltd. vide its Order No. MAH/ AAAR/55-R/03/2019-20 dated 02.08.2019 = 2019 (11) TMI 478 - APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA , M/s Micro Instrument (Mrs.Vishakha Prashant Bhave), vide appeal order no. MAH/AAAR/SS-RJ/26/2018-19 dated 22.03.2019 = 2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (e) of Section 97 (2) of the CGST Act, 2017 has got a very wide connotation and would cover all sorts of transactions, where the Advance Ruling on the questions related to the determination of the liability to pay tax can be sought by the Applicant. 5.8.5 Hence, in view of the decision of the Hon ble Kerala High Court and the Hon ble Maharashtra Appellate Authority for Advance Ruling we now discuss the place of supply as under: 5.8.6 The term export of service has been defined under Section 2(6) of the Integrated Goods and Services Tax Act, 2017 (IGST Act) as under:- 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 1[or in Indian rupees wherever permitted by the Reserve Bank of India); and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation I in section 8; 5.8.7 The subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (7) Where the services referred to in sub-section (3) or sub-section (4) or sub-section (5) are supplied in more than one State .. Applicant does not provide such services listed in sub-section (3), (4),(5) explained above. 13 (8) 8) The place of supply of the following services shall be the location of the supplier of services, namely: --- (a) services supplied by a banking company, ., (b) intermediary services; (c) services consisting of hiring of means of transport, Applicant does not provide such services. 13 (9) (9) The place of supply of services of transportation Applicant does not provide such services 13 (10) (10) The place of supply in respect of passenger transportation . Applicant does not provide such services 13(11) (11) The place of supply of services provided on board a conveyance .. Applicant does not provide such services 13 (12) (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the applicant did not attend online hearings scheduled on 10.11.2020 and 01.12.2020 and requested for adjournment. The first request for adjournment in respect of online hearing dated 10.11.2020 was received from the applicant vide email dated 05.11.2020 and adjournment was granted. The second request for adjournment in respect of online hearing dated 01.12.2020 was not granted as already sufficient opportunities had been given to the applicant for presenting his case on the said issue. 5.8.8.2 Hence, in view of details having not been submitted by the applicant, we are unable to answer this question. 5.9 The applicant vide question nos. 8 has asked for a clarification as to whether their services are export of services, in case buyer is from India, the goods/ services are stored in CLOUD which are the servers outside India therefore even though payment is received in rupees, being services are received from distantly installed servers. 5.9.1 In respect of this question, it is seen that the service is supplied by the applicant from taxable territory to recipients who are also located in taxable territory. The taxable event under GST Laws is supply of goods or services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r if not allowed as exports then whether GST is leviable? What is rate of SGST CGST or IGST? Under which HSN Code or SAC? Answer: - Since both, the customer and the applicant are in India, GST would be liable @18% under SAC 998439. Question.7) If customer pays for the e-goods in Indian rupees and goods delivered through CLOUD located outside India whether SGST CGST or IGST leviable on such transactions? Answer : - GST is leviable, in view of the discussions made above. Question.8) In case where customer / buyer is from out of India and payment is done in dollar according to us it is export of goods / services and therefore neither SGST CGST is leviable? Please clarify the same. Answer : - Not answered in view of discussions made above. Question.9) In case buyer is from India the goods/ services are stored in CLOUD which are the servers outside India therefore even though payment is received in rupees, it is again export of services being services are received from distantly installed servers. Hence No CGST and or SGST is leviable? Answer : - Said services are not export of services and hence GST must be discharged by the applicant. Question. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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