9911796707
TMI Blog2021 (5) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT 2.1 Dubai Chamber of Commerce & Industry, Dubai (hereinafter referred to as "DCCI UAE") is a public, non-profit organization, whose stated purpose is to support the business community in Dubai and promote Dubai as an international business hub. 2.2 Dubai Chamber of Commerce and Industry - Liaison office (hereinafter referred to as "DCCI LO" or "THE APPLICANT") is established by DCCI UAE in Mumbai, Maharashtra. Applicant is also a non-profit organization, formed to represent, support and protect the interests of the Dubai business community in India, by creating a favorable environment, promoting Dubai businesses and by supporting development of business in India. Under the ambit of RBI norms, Applicant shall undertake below liaison/ representation activities in India; 1- Liaison between India office and Dubai office 2- Attending and representing DCCI in various seminars, confe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ects businesses in India with business partners in UAE and vice versa 2.8 Sub-section 102 of section 2 of CGST Act, 2017 defines the term "services" and the term "supply" has been defined under Section 7 of CGST Act. 2.9 Thus, as per the statutory provisions, any supply of goods or services (except supply of alcoholic liquor for human consumption and specified petroleum products) would be subject to a levy of GST and the prima facie condition to describe any transaction as service/ supply under GST is receipt of consideration against such supply and the same is absent in the subject case. 2,10 For treating activities between related/ distinct person as supply, the pre-condition is that the said activity should be made in the course of furtherance of business, which is absent in the subject case. 2.11 Hence deemed supply provision as mentioned in Schedule I of CGST/ MGST Act, 2017 shall not be applicable in case of liaison work undertaken by DCCI LO. Therefore, applicant is not liable to obtain registration under GST laws. 2.12 Similar views have been adopted in similar matters by the recent rulings by the Advance Ruling Authorities of Rajasthan and Tamil Nadu, in the case of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DCCI UAE will be treated as consideration. Thus, the claim of the applicant that since it is a nonprofit organization their activity is not to be considered as supply, is not correct. 3.2 With respect to expenses reimbursed to the applicant, the activity undertaken by the DCCI LO also cannot be considered as that of a pure agent even if DCCI LO is getting reimbursement from DCCI UAE on cost to cost basis only because the applicants activities does not satisfy the provisions of Rule 33 of CGST Rules 2017 which has defined a Pure Agent. 3.3 Under Section 15 (2) (c) of the CGST Act 2017, any amount charged for anything done by the supplier in respect of the supply of the goods or services or both is treated as consideration. 3.4 In the present case, applicant is receiving payments from DCCI UAE in respect of the activity undertaken by it for "DCCI UAE". The provisions of Section 15 (2) (c) of the CGST Act 2017, and also the provisions of Rule 2 (31) of the CGST Rules are applicable to Applicant's activity and the same is to be treated as consideration. The consideration received by the applicant is taxable under Section 2(31) of the CGST Act 2017. Any amount received in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on cost to cost basis. (b) From their provisional Balance Sheet as on 31st August 2019, it is observed that they are having a cash balance of Rs. 13, 39,384 I-. This proves that from 31.03.2019 to 31.08.2019, the applicant has got a further increase in profit of Rs. 10,89,700 /-. Also it is observed that in the current liabilities there is no equivalent amount of liability of Rs. 13,39,384/- clearly proving that the amount of cash lying on hand on 31.08.2019 is not for any amount of outstanding liability as on 31.08.2019: (c) Also it is observed that an amount of Rs. 23,17,270/- is shown in the Liability side of the Balance Sheet as on 31.08.2019 under the Head of DCCI-UAE. This clearly shows that their Head Office has made remittances to the applicant exceeding the actual cost incurred by it which has resulted in a creation of Liability to the extent of Rs. 23,17,270/-. It appears that for the period 01.01.2019 to 31.08.2019, the applicant has received Rs. 1,09,73,532 /- which is far exceeding the expenditure amount of Rs. 82,81,609 / for the same period. 3.10 From the facts stated above, it is clear that, the applicant is not functioning on a cost to cost basis and is receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and requested for admission of their application. Jurisdictional Officer Shri Iyer K.S. Suryanarayan, Superintendent, Range-01, Division-IV, Mumbai East Commissionerate also appeared. 4.2 The case was again fixed for hearing on admission on 22.01.2020. Shri Bhadresh Vyas, C.A., appeared and made both, oral and written submissions. Jurisdictional Officer Shri Iyer K.S. Suryanarayan, Superintendent, Range-01, Division-IV, Mumbai East Commissionerate also appeared and made written submissions. 4.3 The case was admitted and final hearing was held on 03.03.2020. Shri Bhadresh Vyas, C.A., appeared and made oral and written submissions. Jurisdictional Officer Shri Iyer K.S. Suryanarayan, Superintendent, Range-01, Division - IV, Mumbai East Commissionerate also appeared and made submissions. 4.4 The case was once again fixed for final e-hearing on 26.11.2020. Authorized Representative of the applicant, Shri. Rushabh Gandhi CA., and Shri Lucky Ahuja CA., both were present. Jursdictional officer Shri lyer K.S. Suryanarayan, Suprintendent, Range-I, Mumbai was also present. The authorized Representatives agreed to establish, with documents that they are a non-profit organization. They ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now examine the submission made by the applicant that, it connects businesses in India with business partners in Dubai, to ascertain whether the applicant is an Intermediary in the subject case. 5.6 As per the definition, an intermediary: (i) means a broker, an agent or any other person, by whatever name called, (ii) who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, (iii) but does not include a person who supplies such goods or services or both or securities on his own account. 5.6.1 In the subject case the applicant calls itself a liaison office and an intermediary can be called "by whatever name". So in the subject case condition number (i) is satisfied. 5.6.2 The applicant has not categorically mentioned that it is arranging or facilitating supply of goods or services or both but has definitely said that it connects businesses in India with business partners in Dubai. The term business, in a general sense, means an activity which generates income, where there may be trading of goods or provision of services, etc. The applicant has not given details of their business partners in Dubai but we have no hesitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods for up to one year and covers almost everything including Commercial samples, Professional equipment, goods for use at trade fairs, shows, exhibitions, events. With the ATA Carnet, salesmen, exhibitors, and other business travelers may: Make advance custom s arrangements at predetermined cost; Visit several countries; Use their ATA Carnet for several trips during its one-year validity; Return to their home country without problems or delays. This particular document is issued by the Dubai Chamber, UAE. There is a particular cost attached to each and every Carnet issued and the said cost varies depending on various factors like whether the same is being issued to members or non-members, etc. For example: (i) ATA Carnet Fess for only one visit for a member is AED 800 while the same Carnet is issued to a non-member for AED 1800. Further, there are charges for Carnet to be issued for more than additional countries, there are regularization fees, cancellation fees, etc. all collected by the Dubai Chamber of Commerce, UAE. The website mentions that a collection of Security Deposit which may differ according to value of goods and number of countries intended to visit. The website ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sinesses to participate at key exhibitions in Dubai to boost their International business, along with gathering & dissemination of market intelligence. The Mumbai office also facilitates business by way of B2B meetings, trade missions, networking events, buyer seller meets and brainstorming with businesses on their plans for Dubai and India." 5.7.3 Thus there is definitely, a supply of services by the applicant to various businesses in India and Dubai and such supply is done by the applicant as an intermediary as has been discussed above. 5.8 We also find that the jurisdictional officer has perused the financial records of the applicant, made detailed observations in the departmental submissions and has opined that the applicant is not a non-profit organization and is effecting supply of services for a consideration for which, it has to obtain GST registration and pay applicable GST on its transactions. 5.9 Finally, we observe that, in the Applicant's letter dated 21/06/2020, there is Annexure-A attached to it and on page No. 3 of said Annexure, applicant has given the meaning of commerce as under. "The buying and selling of goods and services, especially in large amount." 5.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fice was set up only to act as a communication channel between its Head Office and Indian supplier of goods to its Head Office in terms of its procurement, order placement, quality checks, etc. 5.12.1 However in the subject case, the applicant connects businesses in India with business partners in Dubai. In other words applicant is providing services, to various business in India and Dubai. Hence, the facts of both the cited cases are different from the facts of the present case. 5.13 Finally, in view of the fact that the applicant is receiving consideration from its Head Office in excess of expenses incurred by it, we agree with the jurisdictional officer's view that, the applicant cannot be treated as a non-profit organization. Also, the application is providing intermediary services for which it is liable to pay GST. 06. In view of the above discussions, 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-35/2019-20/B-14 Mumbai, dt. 24/05/2021 For reasons as discussed in the body of the order, the questions are answered thus Question A):-Whether activities ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
