Question 54:

Service provider is in Delhi. He provides advertising agency service to a client in US. The ads are to be placed on delhi roads(outdoor), bus shelters etc. The US company also has a delhi office. But the service is to be provided to the US head office, and invoice to be raised on US office, and payment to be received in foreign currency from US.
Does it qualify to be `export of services` and the related benefits?

Answer

The service will be considered as export of service only if all the conditions given under section 2(6) of IGST Act are fulfilled which is reproduced below:

'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
In your case condition (iii) is not satisfied as place of supply of service as per section 13(3)(a) of IGST Act is the location where the service is actually performed i.e. Delhi, so it will not be treated as Export of service.
 (reply dt. 05/17/2018)