Question 51:-
Individual person is registered under GST and engaged in business of providing
software designing service to USA based company ,i.e. ( non Taxable Terriority)
. What is GST applicability , Export of services OR under Reverse Charge.
Answer
As per section 16 of IGST Act, Zero rated supply includes supply of goods or
services or both. You can export any service under LUT without payment of IGST or
can export the service on payment of IGST and claim refund of IGST paid on
completion of export.
We would like to point out that the export of service is subject to condition
given in section 2 (6) of IGST ACt same is reproduced below
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;
From the fact given in your question your service is covered under definition
of 'online information and database access or retrieval services'
in section 2 of IGST Act , which is reproduced below:-
'online information and database access or retrieval services' means services
whose delivery is mediated by information technology over the internet or an
electronic network and the nature of which renders their supply essentially
automated and involving minimal human intervention and impossible to ensure in
the absence of information technology and includes electronic services such
as,''
(i) advertising on the internet;
(ii) providing cloud services;
(iii) provision of e-books, movie, music, software and other intangibles through
telecommunication networks or internet;
(iv) providing data or information, retrievable or otherwise, to any person in
electronic form through a computer network;
(v) online supplies of digital content (movies, television shows, music and the
like);
(vi) digital data storage; and
(vii) online gaming;
Further as per Section 13(12) Place of supply in your case is USA. Section
13(12) is reproduced below:-
SECTION 13 of IGST Act
(12) The place of supply of online information and database access or retrieval
services shall be the location of the recipient of services.
Thus, In our opinion if you are fulfilling all the above said conditions then
your supply is Export of service and there is no reverse charge on the same in
GST.
In case you are having any other situation in mind, please elaborate so that we
may provide adequate answer. (Reply dt. 24/4/2018)