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TMI Blog2024 (9) TMI 661X X X X Extracts X X X X X X X X Extracts X X X X ..... r the AP Goods & Services Tax Act, 2017. 3. Brief Facts of the case: 1. M/s. MCM Pacific PTE LTD, (Hereinafter referred to as "applicant") a company is a Singapore based company, duly registered under the local laws and is in the business of power generation and distribution. The Applicant, currently, does not have any place business in India and resultantly is not registered in India under any Act. The Applicant is in the process of procuring certain goods/ assets as per the agreement from M/s Lanco Kondapallli Power Limited ("Lanco") a company which is currently undergoing liquidation in India. The Applicant is acquiring the said goods/ assets for the further transfer of the same to Myanmar after dismantling, as The Applicant does not have any business operations in India. The Applicant 's intention to procure the said assets during the liquidation process is to transfer the same to Myanmar. 2. The Applicant first procures the assets as per the agreement, then dismantle all the assets and then transfer them to Myanmar. Intention of the Applicant is to take the assets out of India to a place outside India. 3. Intention of the Applicant is to take the assets out of India to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocuring the same incompliance to the order of National Company Law Tribunal ("NCLT"). As provided in section 2 (5) of the IGST Act, taking goods outside India falls under the definition of export of goods. * Hence, the current application is being filed to seek Advance Ruling with regard to applicability of provisions of section of 16 of the IGST Act, which allows the transaction of export of goods as "Zero Rated Supply" on which effective tax under GST will be NIL. Further, as per the provisions of section 16 of the IGST Act, Zero Rated supplies of goods can be made without payment of GST subject to fulfilment of certain conditions. In the present case, the Applicant intends to take goods outside India and accordingly is of the view that the supply of such goods may be treated as "Zero Rated Supply" and the same can be made without payment of GST after filing a Letter of Undertaking as provided in the GST law. 6. Representation by the Lanco Kondapalli Power Limited: * This representation letter is in reference to the Application for Advance Ruling filed by M/s MCM Pacific Pte Limited ("MCM') dated March 8, 2024 for assessing the tax liability on the purchase of certain a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at the existing Plant location of the Corporate Debtor in Vijayawada, Andhra Pradesh, India upon the issuance of the sale certificate. * The Process Document clarifies that after issuance of Sale Certificate, the successful bidder, in this case MCM, will be required to complete the entire process of taking possession of the assets and removing the same from the premises of the Corporate Debtor. Hence, the sale process will conclude in India upon issuance of Sale Certificate by the Liquidator and MCM will be responsible for dismantling, transporting and exporting the Phase III Assets to Myanmar. In the light of the same, the Liquidator will not be acting in the capacity of an exporter. * We request your good offices to take the above facts into consideration while your assessment of the Advance Ruling Application in accordance with applicable laws. * It is pertinent to note that currently, the sale of Phase III Assets is not complete since the Sale Certificate has not been issued to MCM as payment of GST by MCM is pending. * MCM has filed the Application for Advance Ruling for seeking determination of tax liability pursuant to the same. Considering that liquidation is a t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate Insolvency Resolution Process was commenced against the Corporate Debtor ("CIRP") vide Order of NCLT, Hyderabad Bench dated April 23, 2019.Since no Resolution plan was approved pursuant to the CIRP, Application was filed with NCLT for initiation of liquidation process. By way of Order dated April 16, 2021, Hon'ble NCLT commenced liquidation proceedings of the Corporate Debtor as per Provisions of Insolvency and Bankruptcy Code, 2016 and the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, and Mr. Pankaj Dhanuka was appointed as Liquidator ("Liquidator"). As per Terms of the Process Document and LOI, MCM being the successful bidder is required to pay the entire sale consideration and is required to bear all applicable taxes and duties as may be applicable. No incidence of tax or other rates will be applicable on or borne by the Corporate Debtor or the Liquidator. The sale certificate will be issued upon payment of such sums. As per the representation of M/S Lanco,Kondapalli it is submitted that the successful bidder, in this case the applicant, will be required to complete the entire process of taking possession of the assets and removin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The export of services has been defined in sub-section (6) of the section 2 of the IGST Act, 2017 as extracted below; "export of services" means the supply of any service when,- (i) the supplier of service is located in India; (ii) the recipient of seruice 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; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; Explanation 1 of the Section 8 of the IGST Act provides for the conditions wherein establishments of a person would be treated as establishments of distinct persons, which is reproduced as under: Explanation 1.-For the purposes of this Act, where a person has,- (i) an establishment in India and any other establishment outside India; (ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or (iii) an establishment in a State or Union territory and any other establishment being a business vertical re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments of distinct persons and cannot be treated as export of services. * From the perusal of the definition of "person" under sub-section (84) of section 2 of the CGST Act, 2017 and the definitions of "company" and "foreign company" under Section 2 of the Companies Act, 2013, it is observed that a company incorporated in India and a foreign company incorporated outside India, are separate "person" under the provisions of CGST Act and accordingly, are separate legal entities. Thus, a subsidiary/ sister concern/ group concern of any foreign company which is incorporated in India, then the said, company incorporated in India will be considered as a separate "person" under the provisions of CGST Act and accordingly, would be considered as a separate legal entity than the foreign company. In the instant case, the applicant is not having any GST registration in India. Hence, the transaction done by the applicant does not fall under the definition of export of goods. Hence, the related transactions shall not be considered as ZERO-RATED SUPPLY under the provisions of the GST Act, 2017. RULING (Under Section 98 of Central Goods and Services Tax Act, 2017 and the Andhra Pradesh Goods an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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