TMI Blog2023 (8) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... d services rendered by the applicant to the recipient qualifies to fall under export of services on fulfilling the conditions specified under section 2(6) of the IGST Act, 2017, which in turn is considered as a zero-rated supply in terms of section 16 (l)(a) of the IGST Act, 2017. The supply of information technology enabled services rendered by the applicant to the recipient qualifies to fall under export of services on fulfilling the conditions specified under section 2(6) of the IGST Act, 2017, which in turn is considered as a zero-rated supply in terms of section 16 (l)(a) of the IGST Act, 2017. - SHRI R. GOPALSAMY, I.R.S., AND SMT. N.USHA, MEMBER 1. Any appeal against this Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Rulings, Chennai under Sub-section (1) of Section 100 of Central Goods and Service Tax Act / Tamil Nadu Goods and Service Tax Act 2017 ( the Act in short) within 30 days from the date on which the ruling sought to be appealed against is communicated. 2. In terms of Section 103(1) of the Act, this Advance ruling pronounced by the Authority under Chapter XVII of the Act shall be binding only- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ftware contract work and if applicable rate of GST. 4.1. The Applicant is a Private Limited Company incorporated in India under the Companies Act, 2013. They have been awarded Projects by M/s. Luksha Limited, UK and M/s. Spovens Limited, UK to provide the following services; A. M/s. Luksha Limited, UK:- Development of Functionalities and Dashboards based on the SAP Application. Delivery of specific features by usage of the BW, DWC, SAC and analysis for Office. Technical advice on feasibilities based on the SAP solution. Supporting Team Members to proper plan the Sprints and support for keeping the committed scope and timelines. Proper Testing of the deliveries ensuring high quality and less incidents within the productive Environment. Following Guidelines on documentation, testing and transportation of technical developments. Full compliance to any Quality Assurance Guidelines. Strong communication towards the Project Manager and/ or technical Product Owner. Introducing best practices for helping to increase organizational effectiveness. B. M/s. Spovens Limited, UK: Consulting Services for monitoring / changing/ fixing SAP ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he additional submissions made during the hearing and the issue to be discussed in the instant case is the taxability of the services rendered by the Applicant based on the details and documents furnished. 7.2. Based on the facts presented, it is seen that the applicant is supplying Information technology-enabled services to a company located outside India, on his own. Prima facie, the services rendered by the applicant appears to be falling under export of services. 7.3. In this connection, it is observed that, Export of services as defined under section 2(6) of the IGST Act, 2017 essentially involves determination of place of supply which is not included as a question under section 97(2) of the CGST TNGST Act, 2017 on which Advance Ruling can be sought. However, this case is admitted based on the following observations made by the Hon'ble High Court of Kerala in Writ Petition (Civil) No. 32634 of 2019, challenging the decision of the Advance Ruling Authority, Kerala in a similar issue;- A reading of clauses (a) to (g) of sub-section (2) of Section 97 of the CGST Act would make it clear that 7 items are enumerated as per clauses (a) to (g) of sub-section (2) of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e light of these dynamic scenario in the fast changing global economy that the Parliament has taken a very proactive role with a very wide vision, the parliament in its wisdom has decided to mandate such a provision as in clause (e) of Section 97 (2), whereby the applicant is empowered to seek advance ruling even on the said larger issue of determination of liability to pay tax on goods or services or both and m view of such a scenario, the Advance Ruling Authority is obliged to entertain such plea and consider it on merits and then render its opinion/ answer to such a plea that may be raised and to render its advance ruling on those aspects in accordance with the provisions contained in the above said Acts. In the instant case, it is true that the issue relating to determination of place of supply as aforestated is not expressly enumerated in any of the clauses as per clauses (a) to (g) of Section 97(2) of the CGST Act, but there cannot be any two arguments that the said issue relating to determination of place of supply, which is one of the crucial issues to be determined as to whether or not it fulfills the definition of place of service, would also come within the ambit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons. 7.4.2. As per the above Explanation, an establishment of a person in India and another establishment of the said person outside India are considered as establishments of distinct persons. 7.4.3. Further, Ministry of Finance has issued clarification relating to export of services in Circular No. 161/17/2021, dated 20.09.2021 and the relevant paragraphs are extracted as below; Analysis of the issue: 4.1 Clause (v) of sub-section (6) of section 2 of IGST Act, which defines export of services , places a condition that the services provided by one establishment of a person to another establishment of the same person, considered as establishments of distinct persons as per Explanation 1 of section 8 of IGST Act, cannot be treated as export. In other words, any supply 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 qualifies as a 'company' in India as per Companies Act), to the establishments of the said foreign company located outside India (incorporated outside India), would not be barred by the condition (v) of the sub-section (6) of the section 2 of the IGST Act 2017. for being considered as export of services, as it would not be treated as supply between merely establishments of distinct persons under Explanation 1 of section 8 of IGST Act 2017. Similarly, the supply from a company incorporated in India to its related establishments outside India, which are incorporated under the laws outside India, would not be treated as supply to merely establishments of distinct person under Explanation 1 of section 8 of IGST Act 2017. Such supplies, therefore, would qualify as 'export of services', subject to fulfilment of other conditions as provided under sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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