Question

Querry on courier services
1.this s a case of courier agency delivering goods outside india and receiving payments from outside india. all bills are also raised on to the customers outside india.

2. as per faq(2nd edition 31.03.2017) issued by central board of excise and customs(page no-192,q12)
`for international supplies- the place of supply of transport services, other than courier services, shall be the destination of goods. for courier place of supply of services is where goods are handed over to courier.however, if the courier services are performed even partially in india, the place of supply shall be deemed as india[sec 13(3), 13(6) and 13(9) of the igst act]`
i.e. this is domestic services liable to be charged cgst/sgst.
3.as per the provision of sec 13(9) read with 13(2) it is an export of service liable to be charged as nil rated supply.
kindly advice whether said courier service will be liable to charge cgst/sgst or will be export of services
 

Answer

Facts of the case:
Courier agency delivering goods outside India, whether Export of service or not.

Law applicable:
Section 13(3) 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:
Provided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services:
Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs or for any other treatment or process and are exported after such repairs or treatment or process without being put to any use in India, other than that which is required for such repairs or treatment or process;
Section 2(6) of IGST Act:
(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; or in Indian rupees wherever permitted by the Reserve Bank of India 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;

Interpretation:

"courier agency" means any person engaged in the door-to-door transportation of time-sensitive documents, goods or articles utilising the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles;

In case of courier service the goods are made physically available with courier agency i.e. supplier of service for the purpose of transportation of goods. Thus as per section 13(3) the place of supply in this case is in India i.e. the Place of Courier Agency.

In order to classify as Export of service all the conditions specified in the definition of Export of service needs to be satisfied. In the instant case as the place of supply is in India, thus it will not be considered as Export of service.

Conclusion:

As Courier service is not considered as Export of service, thus it is not ZERO rated supply and CGST & SGST will be charged. (Reply dt.31/05/2019)