Question 46:
Person (A) is located in India and providing his technical inspection service to
the recipient (B) located at Germany, The entire consideration for service is
received in foreign exchange.
The nature of service is as under:- (B) The importer of Footwear from India
takes service of (A) under which the Footwear manufactured in the factory of
various suppliers in India are inspected for and on behalf of (B). He had no
agreement or commercial transaction with the manufacturers of Footwear in India.
He is acting solely upon the direction of (B) and receiving consideration for
his services in convertible foreign currency.
I am also sending herewith a copy of Circular No. 2/1/2017-IGST F. No.
354/173/2017-TRU for your reference.
Kindly advice whether GST is leviable or not
Answer
Section 2 of IGST Act defines export as follow
(6) 'export of services' means the supply of any service when,''
(i) the supplier of service is located in India;
(ii) the recipient of service 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;
We would like to point out that the export of service is subject to all
condition given in section 2 (6) of IGST.
According to the fact given in your queries place of supply as per section 13(3)
(a) is the location where the service is actually performed i.e. India in your
case. Section 13(3) (a) of IGST Act for your reference is reproduced as under:-
SECTION 13 of IGST Act
(3) The place of supply of the following services shall be the location where
the services are actually performed, namely
(a) services supplied in respect of goods which are required to be made
physically available by the recipient of services to the supplier of services,
or to a person acting on behalf of the supplier of services in order to provide
the services:
Thus, It is not export of service.
Please note that Circular No. 2/1/2017-IGST F. No. 354/173/2017 is
on Clarification on supply of satellite launch services. (Reply dt. 06/4/2018)