Case Law Details
In re Adani Green Energy Ltd (GST AAR Gujarat)
M/s. Adani Green Energy Ltd. (‘AGEL’) submitted that it requires substantial working capital to undertake its supplies and for this purpose it has raised USD 750 million by issuing Senior Secured Notes (Notes) carrying interest coupon of 4.375% due for redemption in 2024 in terms of Subscription Agreement dated 1st September 2021 entered into with Axis Bank Limited, Singapore and others for acting as Managers. All the Managers do not have any establishment in India and have been incorporated outside India and undertake business from their establishment outside India. A copy of the Subscription Agreement was submitted.
Issue: Whether the Applicant is liable to discharge GST under the reverse charge mechanism in respect of the services of arranging for subscription supplied to the Applicant, by the Managers located in the non-taxable territory?
Held: We find that AGEL issues Notes which are subscribed by Investors. We find that the Senior Secondary Notes issued by AGEL are in the nature of securities. The main supply of Notes is between AGEL and investors both acting as Principals and the Manager is supplying ancillary supply of arranging the main supply between the Principals. We note that an intermediary includes a person who arranges/ facilitates supply of securities between two or more persons. We find that Manager has the characteristics of an agent and a broker, performing subsidiary role in arranging the said main supply. We note that Manager’s role is supportive in main supply. We find the Manager satisfying the definition of Intermediary as per IGST Act. We agree with AGEL that place of supply in present case is determined as per Section 13(8)(b) IGST Act which is the location of Manager. Both the Manager and Place of Supply both being in non-taxable territory, subject transaction is not an import of service as place of supply is outside India.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, GUJARAT
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