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TMI BlogClarification relating to export of services-condition (v) of section 2(6) of the IGST Act 2017X X X X Extracts X X X X X X X X Extracts X X X X ..... y a subsidiary/ sister concern/ group concern, etc. of a foreign company in India, which is incorporated under the laws in India, to the foreign company incorporated under laws of a country outside India, will hit by condition (v) of sub-section (6) of section 2 of IGST Act. 2. The matter has been examined. In view of the difficulties being faced by the trade and industry and to ensure uniformity in the implementation of the provisions of the law across field formations, the Chief Commissioner of State Tax, in exercise of the powers conferred by section 168 of the Gujarat Goods and Services Tax Act, 2017, hereby clarifies the issue in succeeding paragraphs. Relevant legal provisions: 3.1 The export of services has been defined in sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T Act, which is reproduced below: "Explanation 2.-A person carrying on a business through a branch or an agency or a representational office in any territory shall be treated as having an establishment in that territory." 3.4. Reference is also invited to the definition of "person" as provided under the GGST Act 2017, made applicable to the IGST Act vide section 2(24) of the IGST Act 2017. "Person" has been defined under sub-section (84) of the section 2 of the GGST Act 2017, as under: (84) "person" includes- (a) an individual; (b) a Hindu Undivided Family; (c) a company; (d) a firm; (e) a Limited Liability Partnership; (f) an association of persons or a body of individuals, whether incorporated or not, in India or outside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of services by an establishment of a foreign company in India to any other establishment of the said foreign company outside India will not be covered under definition of export of services. 4.2 Further, perusal of the Explanation 2 to section 8 of the IGST Act suggests that if a foreign company is conducting business in India through a branch or an agency or a representational office, then the said branch or agency or representational office of the foreign company, located in India, shall be treated as establishment of the said foreign company in India. Similarly, if any company incorporated in India, is operating through a branch or an agency or a representational office in any country outside India, then that branch or agency or represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, would be considered as a separate legal entity than the foreign company. Clarification: 5.1 In view of the above, it is clarified that a company incorporated in India and a body corporate incorporated by or under the laws of a country outside India, which is also referred to as foreign company under Companies Act, are separate persons under the GGST Act, and thus are Separate legal entities, Accordingly, these two separate persons would not be considered as "merely establishments of a distinct person in accordance with Explanation 1 in section 8". 5.2 Therefore, supply of services by a subsidiary/ sister concern/ group concern, etc. of a foreign company, which is incorporated in India under the Companies Act, 2013 (and thus qual ..... X X X X Extracts X X X X X X X X Extracts X X X X
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