In re GSPC (JPDA) LTD (GST AAR Gujarat)
On reading the Section 2(14) IGST Act, we find that the location of the recipient (GSPC(J)) in subject matter is Gujarat, which is a taxable territory. Further, as per entry 1 to Notification 10/2017-Integrated Tax(R), we find that the applicant, being the recipient of service, is liable to pay IGST on the supply of service by ANP, which is located in non-taxable territory) on reverse charge basis. Entry No.1 to Notification 10/2017-Integrated Tax(R),, reads as follows:
In exercise of the powers conferred by sub-section (3) of section 5 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), the Central Government on the recommendations of the Council hereby notifies that on categories of supply of services mentioned in column (2) of the Table below, supplied by a person as specified in column (3) of the said Table, the whole of integrated tax leviable under section 5 of the said Integrated Goods and Services Tax Act, shall be paid on reverse charge basis by the recipient of the such services as specified in column (4) of the said Table:-
| Sl. No. | Category of Supply of Services | Supplier of
service |
Recipient of Service |
|---|---|---|---|
| (1) | (2) | (3) | (4) |
| 1. | Any service supplied by any person who is located in a non-taxable territory to any person other than non-taxable online recipient. |
Any person located in a non- taxable territory |
Any person located in the taxable territory other than non-taxable online recipient. |
Thus we find that this situation, calls into action, the provisions of Entry No. 1 of Notification 10/2017-Integrated Tax(R),. What we find here is the supply of service by ANP which is in non taxable territory to GSPC(J) which is in taxable territory. This is import of service by GSPC(J) and the GST liability mechanism is Reverse Charge.
Read AAAR Ruling: GST not Payable on liquidated damages for breach of exploration obligations
FULL TEXT OF THE ORDER OF AUTHORITY OF ADVANCE RULING, GUJARAT
BRIEF FACTS
The applicant M/s. GSPC(JPDA)LTD., has submitted that petroleum existing within the Joint Petroleum Development Area (JPDA) is a resource exploited jointly by Timor-Leste and Australia; that the applicant along with other concessionaries entered into Production Sharing Contract(PSC) dated 15th November, 2006 with Timor Sea Designated Authority for undertaking the exploration activities in the Block JPDA 06-103 awarded to it, in the Joint Petroleum Development Area(JPDA).
2. The applicant has submitted that Autoridade Nacional do Petroleo E Minerals (ANP) is Timor Leste’s institution and is vested with administrative and financial autonomy to act as regulatory authority for the oil, gas and mineral related activities in accordance with the provisions of the Petroleum Activities Law, Interim Petroleum Mining Code, the Timor Sea Treaty and the Diploma Ministerial on mineral activities; that GSPC(JPDA) holds 20% participating interest(PI) in Block JPDA 06-103 and the list of other concessionaries and their participating interest(PI) are as follows:
