In re Segoma Imaging Technologies India Pvt. Ltd. (GST AAAR Maharashtra)
in order to determine which levy, whether CGST and SGST, or IGST will be imposed on the said supply of photography services of the Appellant, we will have to determine the place of supply. Then only, we can determine the nature of levy, whether CGST and SGST or IGST, which will be imposed on the said supply of service of the Appellant. Since, we do not have jurisdiction to determine the place of supply of services or goods or both, no ruling on this particular question can be passed by the Advance Ruling Authority. This rationale also holds true in case of the second question asked by the Appellant i.e. whether the said supply could be treated as export within the meaning of Section 2(23) read with Section 2(6) of the IGST Act, 2017.
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, MAHARASHTRA
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the MGST Act.
The present appeal has been filed under Section 100 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by Segoma Imaging Technologies India Pvt. Ltd.(herein after referred to as the “Appellant”) against the Advance Ruling No. GST-ARA-30/2018-19/B-92 dated 20.08.2018.
BRIEF FACTS OF THE CASE
A. Segoma Imagining Technologies India Pvt Ltd (hereinafter referred as Segoma India) is Indian private limited company set up under the Indian Companies Act.
B. Segoma India is 100% Subsidiary of Segoma Ltd (hereinafter referred as Segoma Israel) which is based in Israel.
C. Segoma Israel is subsidiary of R2Net which is based in US.
D. R2Net has agreement with customers for listing Diamonds online on website www.jamesallen.com.
E. As per agreement between R2Net and customers of R2Net, R2NET lists on the system only those diamonds that are photographed with R2Net’s proprietary Diamond Display Technology. Customer agrees to send its diamonds and/or gemstones to be photographed in R2Net’s photography centers on a regular basis.
F. R2Net has appointed Segoma Israel for photography service. Inturn, Segoma Israel has made agreement with Segoma India to do photography service.
G. Segoma Imaging Technologies has developed a method of providing potential buyer(s) with what could be simplified as a ‘3D model’ of the valuable stones & jewellery made available for the purchase thereof. The uniqueness of Segoma’s technology is the ability to capture and display 3D real-life images of diamonds and gemstones to the extent that through these interactive images, an observer can identify their colour, clarity and cut. This grants buyers the confidence to rely on these images and make the right choice when deciding whether to make a purchase.
H. Customers of R2Net give diamond on returnable basis to Segoma India. Segoma Israel does not have role in receiving diamond. Segoma India issues memo of receipt of diamonds to customers of R2Net. Segoma India takes photos of diamonds and upload photos of diamond on software of Segoma Israel.
I. Segoma India charges Segoma Israel for providing above service of photography. Segoma Israel makes payment in convertible foreign exchange to Segoma India.
J. Segoma India does not give copy of photos to customers of R2Net and does not charge any fees to customers of R2Net. R2Net has given link of software through which Customer can view photos but they cannot download photo from software.
K. Segoma India is currently catering to Indian customers of R2Net only.
Grounds of Appeal
1. Segoma Imaging Technologies India Private limited (“Applicant”) had filed application under section 97 of the Central Goods and Services Tax Act, 2017 and Maharashtra Goods and Services Tax Act, 2017 dated 23.05.2018 before Maharashtra Authority for Advance Ruling. The Learned AAR passed an order dated 20.08.2018 (received on 07.12.2018) stating that conditions (iii) and (v) of section 2(6) “Export of services” of the IGST Act are not fulfilled by the Applicant.
Following are the conditions of section 2(6) of the IGST Act reproduced as below: –
As per section 2(6) of IGST Act, “export of services” means the supply of any service when, –
