TMI Blog2022 (10) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... ter may be remanded back to GAAR for fresh consideration and decision. The appellant has now' presented new facts which have not been placed before the GAAR and the ruling given by the GAAR is thus based on different facts. Further, as the appellant have got the subject advance ruling based on different set of facts, the advance ruling given is not valid in view of the provisions of Section 103(2) and 104(1) of the CGST Act. 2017. The matter is remanded to the Authority for Advance Ruling i.e. the GAAR for fresh decision. The GAAR will take into consideration all aspects of the matter and decide the case afresh following the principles of natural justice. - GUJ/GAAR/APPEAL/2022/21 - - - Dated:- 27-9-2022 - MILIND TORAWANE AND VIVEK RANJAN, MEMBER Present for the appellant : Jigar Shah (Advocate) At the outset we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act. 2017 (hereinafter referred to as the 'CGST Act. 2017' and the 'GGST Act. 2017') are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analyzing data and targets, designing the products, making prototypes, verifying and validating the process and product to foreign company; all the results of these activities undertaken by the appellant are then provided to the foreign company comprising of findings, performances, parameters, know-how. inventions, developed processes, objects and programs in the form of a report. 4.1 The appellant further submitted that they raise periodic invoices of such services provided by them on the foreign customer and the consideration is received by the appellant in foreign currency; the invoices raised by them presently are inclusive of IGST at the rate of 18% on the taxable value of the R D services provided to the foreign company and are thus making payment of IGST on the R D services provided to foreign companies; the appellant is of the view that the services provided by them falls under 'export of service' and is thereby exempted from tax liability under IGST Act. 2017; the R D services provided by the appellant would qualify as zero-rated supply in terms of Section 16 of the IGST Act, 2017; Section 7(5) of IGST Act, 2017 provides that the supply of service shall be trea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e subject services are liable to CGST and SGST. 6. Aggrieved by the aforesaid advance ruling, the appellant has filed the present appeal. 6.1 The appellant submitted that the ruling has not given any reasonable basis to conclude as to why the services in the present case are falling under Section 13(3)(a) of the IGST Act. Further appellant submitted that: the authority has failed to take into consideration that in the present case, the goods supplied by the foreign customers are getting consumed while performing the services on them and no goods are sent back by the appellants to the foreign customers; the present situation is not getting covered by the provisions of Section 13(3)(a) of the IGST Act. as observed in the ruling; that the services provided by the appellant are covered under Section 13(2) of the IGST Act; that the appellant is carrying out R D services on the samples/goods provided by the foreign company, which is located outside India; it is a settled principle of law that when the service is consumed outside India, tax is not leviable in India; that reliance in this regard can be placed on the following cases wherein it has been specifically held that even th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the services provided by the appellant are covered under Section 13(2) of the IGST Act; the services provided by the appellant falls under 'export of service' as per the definition under Section 2(6) of the IGST Act. 2017; the services provided by the appellant amounts to zero-rated supply in terms of Section 16 of IGST Act; the impugned ruling is thus liable to be set aside. 7. The authorized representative/advocate for the appellant appeared for the personal hearing, which was conducted through virtual mode on 08.09.2022. During the course of personal hearing the authorized representative/ advocate for the appellant submitted that there is a factual change in the facts of the case to the extent that the goods/samples on which R D services are carried out are not supplied by the foreign customer but the same are manufactured in India by the appellant and detailed report is provided to the foreign customer. He further submitted that they agree to resubmit their case before the GAAR if the matter is remanded back. 7.1 The appellant further vide his letter/mail dated 15.09.2022 submitted that; inadvertently wrong facts were mentioned in the Advance Ruling Applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the foreign customer. However the correct facts as informed by the appellant is that the goods on which R D services are carried out are manufactured in India by the appellant and the detailed report is provided to the foreign customer after carrying out R D testing thereon. 9.1 We find that the appellant in their application made before the GAAR has submitted that the foreign entities send the product samples/goods for R D purposes to the appellant in India; that the appellant is carrying out such R D activity in India on the goods provided to them by the foreign customers and submitting a detailed report to them thereafter. The appellant have also submitted that they have entered into a contract with Hilti Aktiengesellschaft. pursuant to which, the appellant is carrying out R D services on the samples / goods provided by the foreign company, which is located outside India. Now the appellant before this authority has submitted that these were inadvertently wrong facts mentioned in the advance ruling application made before the GAAR. They have now pointed out that the goods arc not supplied to the appellant by the foreign customer but the same is manufactured by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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