News UpdatesSupply Of Services Outside India By “Intermediaries” Not Export, And Hence, Subject To IGST: Gujarat HC [Read Judgment] Mehal Jain31 July 2020 10:53 PMShare This – xThe Gujarat High Court has ruled that supply of services outside India by “intermediaries” in India is not an export, thereby continuing their liability of 18% IGST . Justices J. B. Pardiwala and Bhargav D. Karia, while upholding the validity of section 13(8)(b) read with Sections 2(13) (which defines intermediary service) of the IGST Act, 2017, asserted that the service provided by…Your free access to Live Law has expiredTo read the article, get a premium account.Your Subscription Supports Independent JournalismSubscription starts from ₹ 599+GST (For 6 Months)View PlansPremium account gives you:Unlimited access to Live Law Archives, Weekly/Monthly Digest, Exclusive Notifications, Comments.Reading experience of Ad Free Version, Petition Copies, Judgement/Order Copies.Subscribe NowAlready a subscriber?LoginThe Gujarat High Court has ruled that supply of services outside India by “intermediaries” in India is not an export, thereby continuing their liability of 18% IGST . Justices J. B. Pardiwala and Bhargav D. Karia, while upholding the validity of section 13(8)(b) read with Sections 2(13) (which defines intermediary service) of the IGST Act, 2017, asserted that the service provided by an intermediary in India cannot be treated as “export of services” under the IGST Act, 2017. Sub-section 8 of Section 13 states that the place of supply of the services shall be the location of supplier of services in case of banking company, intermediary services and services consisting of hiring of means of transport. “It therefore, appears that the basic logic or inception of section 13(8)(b) of the IGST Act,2017 considering the place of supply in case of intermediary to be the location of supply of service is in order to levy CGST and SGST and such intermediary service therefore, would be out of the purview of IGST”, asserted the bench, adding that there is no distinction between the intermediary services provided by a person in India or outside India. “Only because, the invoices are raised on the person outside India with regard to the commission and foreign exchange is received in India, it would not qualify to be export of services, more particularly when the legislature has thought it fit to consider the place of supply of services as place of person who provides such service in India”, stated the bench. The court, however, left it open for the State and the tax department to consider the representation made by the petitioner so as to redress its grievance in consonance with the provisions of CGST and IGST Act. Facts The petitioner has challenged the constitutional validity of Section 13(8)(b) (pertaining to intermediary services) of the Integrated Goods Service Tax Act, 2017, seeking refund of IGST paid on services provided by the members of the petitioner association and to their clients located outside India. The petitioner is an association of recycling industry engaged in manufacture of metals and casting etc., for various upstream industries in India. The members of the petitioner also act as agents for scrape, recycling companies based outside India engaged in providing business promotion and marketing services for principals located outside India. The members of the petitioner also facilitate sale of recycled scrap goods for their foreign principals in India and other countries. Thus, the members of the petitioner association not only deal with goods sold by foreign principals to customers in India but also facilitate sale of goods by foreign principals in non-taxable territory to their customers, who are also located in non-taxable territories. The members of the petitioner association are registered as “Taxable Person” under the provisions of the Central Goods & Service Tax Act, 2017. It was the case of the petitioner that the members of the petitioner association have no role to play in the actual sale and purchase of recycled scrap as the goods supplied by foreign clients to its purchasers are directly shipped by the foreign client to the Indian or overseas purchaser and thereafter, such goods are cleared by the purchaser from the Customs authorities on its own account. The foreign members of the petitioner association raises sales invoice in the name of the purchaser and the purchaser who may be either Indian or overseas directly remits the sale proceeds to the foreign client. According to the petitioner, member of the petitioner association receives only the commission upon receipt of sale proceeds by its foreign client in convertible foreign exchange. The members of the petitioner association raise invoices upon its foreign client for such commission received by them. Thus, according to the petitioner, the transaction entered into by the members of the petitioner association is one of export of service from India and earning valuable convertible foreign exchange for the same. According to the petitioner, IGST cannot be levied on the members of the petitioner association, who are engaged in the transaction of export of service as stated above as the petitioner members’ export of services is covered by the Section 16(1) of the IGST Act, 2017 which provides for “zero rated supply” . Observations The bench noted that the introduction of Goods and Service Tax in India in the year 2017 is with an object of providing one tax for one nation so as to harmonize the indirect tax structure in the country. For the said purpose, the Constitution is amended by the Constitution (One Hundred First Amendment) Act, 2016 to introduce Article 246A which provides for special provision with respect to Goods and Service Tax. Article 246A begins with a non-obstante clause stipulating that notwithstanding anything contained in Articles 246 and 254, the parliament, and subject to Clause-2, Legislature of every State, have power to make laws with respect to Goods and Service Tax imposed by the Union or by such State. Clause 2 of Article 246A empowers the parliament, who has exclusive power to make laws with respect to goods and services tax where the supply of goods or of services or both takes place in the course of inter State trade or commerce. “Thus, the parliament has exclusive power under Article 246A to frame laws for inter State supply of goods of services. The basic underlying change brought in by the GST regime is to shift the base of levy of tax from point of sale to the point of supply of goods or service”, observed the bench. “In that view of the matter, Section 13(8)(b) of the IGST Act,2017 which is framed by the parliament in consonance with the Article 246(2) of the Constitution of India is required to be considered”, concluded the court. The bench appreciated that Section 8 of the IGST Act, 2017 provides for intra-State supply so as to take care for the supply of goods to or by a special economic zone and the goods imported in the territory of India till they cross the Custom in India. Section 8 is subject to provision of Section 10 of the IGST Act,2017 where as Section 12 of the IGST provides for the place of supply of services where the location of supplier and recipient is in India. Section 12(2)(b) stipulates that the place of supply of service made to any person other than registered person shall be the location of the recipient where the address on record exists and location of supply of service in other cases. Section 13 of IGST Act,2017 stipulates that the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India. Sub-section 2 of Section 13 stipulates that the place of supply of service except the services described in sub-section 3 to 13 shall be the location of the recipient of the services and if the location of recipient of service is not available in the ordinary course of business, the place of supply shall belocation of supplier of service. “Thus, sub-section 3 to 13 carves out an exception to the place of supply of services to be the place of recipient of services where the location of supplier or location of recipient is outside India”, reflected the bench. On perusal of provision of Section 13 of IGST Act,2017, the court noted that sub-section 3 to 13 thereof provide different eventualities to determine the place of supply of services. Intermediary services is defined in Section 2(13) of IGST Act,2017 which means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account and accordingly, when intermediary services are provided by brokers, the place of supply could be either the location of service provider or the service recipient. “The petitioner has tried to submit that the services provided by a broker outside India by way of intermediary service should be considered as ‘export of services’ but the legislature has thought it fit to consider such intermediary services; the place of supply would be the location of the supplier of the services. In that view of the matter, it would be necessary to refer to the definition of ‘export of services’ as contained in Section 2(6) of the IGST Act, 2017 which provides that export of service means the place of service of supply outside India”, said the bench. On a Conjoint reading of Section 2(6) and 2(13), which defines export of service and intermediary service respectively, the bench found that the person who is intermediary cannot be considered as exporter of services because he is only a broker who arranges and facilitate the supply of goods or services or both. Accordingly, exemption is granted in IGST rates from payment of IGST in respect of services provided by intermediary in case the goods are supplied in India. “There is no deeming provision as tried to be canvassed by the petitioner, but there is stipulation by the Act legislated by the parliament to consider the location of the service provider of intermediary to be place of supply. Similar situation was also existing in service tax regime w.e.f. 1st October 2014 and as such same situation is continued in GST regime also. Therefore, this being a consistent stand of the respondents to tax the service provided by intermediary in India, the same cannot be treated as “export of services” under the IGST Act,2017 and therefore, rightly included in Section 13(8) (b) of the IGST Act to consider the location of supplier of service as place of supply so as to attract CGST and SGST”, ruled the bench. The contention of the petitioner that it would amount to double taxation was not found tenable in eyes of law because the services provided by the petitioner as intermediary would not be taxable in the hands of the recipient of such service, but on the contrary a commission paid by the recipient of service outside India would be entitled to get deduction of such payment of commission by way of expenses and therefore, it would not be a case of double taxation. “If the services provided by intermediary is not taxed in India, which is a location of supply of service, then, providing such service by the intermediary located in India would be without payment of any tax and such services would not be liable to tax anywhere”, stated the bench, adding that in such circumstances, the contentions raised on behalf of the petitioner are not tenable in view of the Notification No.20/2019 issued by the Government of India, Ministry of Finance whereby Entry no.12AA is inserted to provide Nil rate of tax granting exemption from payment of IGST for service provided by an intermediary when location of both supplier and recipient of goods is outside the taxable territory i.e. India. “Therefore, the respondents have thought it fit to consider granting exemption to the intermediary services viz. service provider when the movement of goods is outside India”, observed the bench, ruling that it cannot be said that the provision of Section 13(8)(b) r.w. Section 2(13) of the IGST Act,2017 are ultra vires or unconstitutional in any manner.Click Here To Download Judgment[Read Judgment]Subscribe to LiveLaw, enjoy Ad free version and other unlimited features, just INR 599 Click here to Subscribe. All payment options available.loading….Next Story
Research by employment analysis firm IRS found that 93 out of 137 organisations use this method to communicate the policy to staff. Some staff used more than one method.The first part of IRS’s report Managing Disability found that 40 respondents said they use meetings, while 34 use team briefings and 33 use posters or leaflets.Less popular options are letters (22), training (16), e-mail (14) and videos (6).The report reviews the main developments concerning the employment of disabled people since the employment provisions of the Disability Discrimination Act came into force in December 1996.• 020-7354 5858, www.irseclipse.co.uk Disability policies put in printOn 8 Aug 2000 in Personnel Today Comments are closed. Previous Article Next Article Related posts:No related photos.
By Max Jenvey of Oxxygen Marketing Partnership, a strategic business accelerator specialising in the bakery, foodservice and convenience retail sectors.My grandmother always used the saying “Penny wise but pound foolish” and, over the years, I’ve come to really understand what she meant.We all need to watch our pennies these days and even more challenging is where we spend our hard-earned pounds. The smart money follows consumers’ views and spending behaviour and delivers back exactly what the consumer demands quality products at value pricing. The real question is can this strategy work for us on the high street?The answer may lie in Sayer’s new brand Poundbakery and, as the name suggests, patrons can find their favourite fresh sandwiches and filled barms for £1, two meat and potato pies for £1 and hot drinks for 50p. This brand development represents a dramatic departure from Sayers 2008 research, which focused on traditional bakery values.Following newly commissioned extensive consumer interviews of all demographics by the Market Creative Consultants in July 2010, Poundbakery was launched as a strategic answer to a challenging economic climate. Sue Benson, managing director at Market Creative told us that they focused on local competitors specifically looking at price sensitivity above and below £1. Results confirmed price versus quality was vitally important in the consumer mind-set, especially in the bakery category. Value at that all-important £1 price point was key, with quality as number one. Other insights included ingredients, locally sourced produce and freshness.This was a very bold move indeed, as not only did Sayers want to retain its loyal customer base, but also gain market share by enticing non-users into its stores.Our colleagues at him! told us that 23% of customers are actively seeking lower-priced or cheaper products today compared to 12 months ago (Food-to-go 2009 report average).Given this focus on lower-priced products are customers prepared to compromise on quality? The short answer is no. Consumer research company him! told us that 43% of customers make their purchase decisions based on product quality, which ranks top. When choosing what food to buy 52% base their selection on freshness, followed by 33% on taste.We can clearly understand why price vs product quality is a recipe for success, so good luck to Poundbakery we’ll be watching your progress.
By Apr 10, only 25 patients still remained in the hospital, 9 of them on respirators, the CDC noted. None of the 163 patients died. A study assessing the outcomes of some of the cases is ongoing, the agency noted. The bamboo shoots had been produced locally by a women’s group, the CDC wrote. They were processed in large containers that held roughly 26 pounds each. Most of the 53 cans made in September 2005 were sold locally. No other outbreaks have been recorded since those cans were produced. Thai health officials quickly traced the outbreak to a Mar 14 religious rite in Nawaimai Village, Pakaluang subdistrict, Baan Luang district of Nan Province, the report said. Investigators interviewed 145 of the 200 people who had attended the festival about their food intake. The only food in common was home-canned bamboo shoots, which are often eaten with chili and shrimp paste. The report said the outbreak occurred 8 years after a smaller botulism outbreak that also was associated with home-canned bamboo shoots. Following that episode, information on safe canning was disseminated throughout the country. Mar 22 CIDRAP News story on outbreakhttp://www.cidrap.umn.edu/cidrap/content/fs/food-disease/news/mar2206botu.html Antitoxin was not available in Thailand, so Thai officials sought help from several international partners. The United Kingdom (with support form the World Health Organization) sent 20 vials of heptavalent antitoxin; CDC sent 50 vials of bivalent antitoxin; and the National Institute of Infectious Diseases in Japan sent 23 vials of trivalent antitoxin. A Canadian company sold Thailand an additional 10 vials of bivalent antitoxin. Apr 18, 2006 (CIDRAP News) The recent outbreak of botulism poisoning traced to bamboo shoots served at a religious festival in Thailand sickened 163 people, according to a report by the US Centers for Disease Control and Prevention (CDC). “This recurrence 8 years later indicates the importance of long-term follow up and continuous inspection and assurance of the quality of food canning,” the CDC said. CDC. Botulism from home-canned bamboo shootsNan Province, Thailand, March 2006. MMWR 2006: 55(14) 389-92 [Full text] Of that number, 141 patients had to be hospitalized, and 10 more were treated as outpatients. A majority experienced abdominal pain, dry mouth, and/or nausea. Forty-two of the hospitalized patients needed mechanical ventilation, the CDC said in the Apr 14 issue of Morbidity and Mortality Weekly Report. See also: