Case Law Details
In re Volvo Eicher Commercial Vehicles Limited (GST AAR Karnataka)
Whether the supplies made by the Applicant to Volvo Sweden is a supply of services and Whether the supplies by the Applicant amounts to export of services to Volvo Sweden and hence zero rated under GST law?
Applicant-M/s Volvo-Eicher Commercial Vehicles Limited is not charging the customer any amount because of a clear commitment from M/s Volvo Sweden that the amount spent for the parts and services involving the parts are going to be reimbursed by M/ s Volvo Sweden. In case of any parts or services which are provided to the customers which are not part of the warranty services, then such amounts are charged to the customers by the applicant or his dealers. Since the amount is paid M/s Volvo Sweden, in monetary terms by issuing credit notes, the “consideration” covers this amount and it is immaterial who makes the payment. Hence there is a supply of parts and services to the customers for consideration and amounts to a supply transaction with the applicant being the supplier and the customer being the recipient of services, but the amount collectable from the customer is being paid by Volvo Sweden. This is clearly proved by the fact that M.s Volvo Sweden is also issuing credit notes to the dealers of the applicant and not just to the applicant, if such service is provided by the dealers.
Even if we consider that the approval of the warranty claim is done by M/s Volvo Sweden and the applicant carries out services and repair work only after such approval, then the applicant is providing services to the customer only as an agent of M/s Volvo Sweden and the services are provided on the direction and on account of M/s Volvo Sweden. Even then, it would be a supply transaction by the applicant to the customer for a consideration being paid by M/s Volvo Sweden (being third party) by way of issuing credit notes to whoever provides such service on their behalf.
In view of the above, it is clear that the transaction is a transaction within the country and is a composite supply of goods or services to the customers by the applicant and hence does not amount to export of services as M/s Volvo Sweden is not the recipient of services provided by the applicant, but only pays the consideration to the provider of such services.
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