GST: Intermediary Marketing Services provided can’t be classifiable as Export u/s 2(6), rules AARR

The Maharashtra Authority of Advance Ruling ( AAR ) has held that intermediary marketing services provided cannot be classifiable as export u/s 2(6) of the IGST Act.

The applicant, Gulf Turbo Solutions LIP engaged in the business of service and repairs of various types of Turbochargers and lying spare parts required for Turbochargers and ship spares, Gulf Turbo Repairs and Services FZC (GTRS) a company registered in Sharjah, UAE & is also in the business of service & repairs of various Turbochargers.

The Applicant agreed to provide Marketing Services to GTRS FZC as per the Marketing Services and entered into an agreement for conducting market surveys & providing GTRS FZC with information on India. It was contended that the intermediary or agent would have documentary evidence authorizing him to act on behalf of the provider of Main Service. It was contended that the service Agreement clearly defines the relationship between the parties as independent contractors and not a Principal and Agent.

The agreement has no provision which gives authority to conclude or negotiate any contract or secure any orders on behalf of GTRS. The applicant contended that the services provided by them would constitute export u/s 2(6) of the IGST Act.

The authority observed that the applicant was acting as an intermediary in the subject case as the applicant acted as a conduit between GTRS and customers in India. Further viewed that the applicant satisfies all the conditions of an intermediary provided u/s 2(13) of the IGST Acts an intermediary.

The Coram of Mr Rajiv Magoo (Central tax) and Mr T. R. Ramnani (State tax) has held that the place of supply in the subject case of the applicant as an intermediary would be the location of the supplier of services under Section 13 (8) of the IGST Act, 2017. It was observed that the location of applicant which is located in the State of Maharashtra, India. It was held that as the place of supply of intermediary services to GTRS is in India and consequently, condition (iii) of export of services as per Section 2(6) of IGST Act is not satisfied.