In re Fulcrum Info Services LLP (GST AAR Karnataka)
a) Whether the back-end support services provided by the applicant to the Juniper Inc. under the agreement would be classified as ‘Support Services’ under the Tariff Heading 9985 of Notification 11/2017 – Central Tax (Rate) dated 28.06.2017? b) Whether the services in question would be treated as Intermediary services or not?
The back-end support services provided by the applicant to the Juniper Inc under the agreement is classifiable as ‘Support Services’ under the Tariff Heading 9985 of Notification No.11/2017 – Central Tax (Rate) dated 28.06.2017 and more specifically under the Service Code 998599.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, KARNATAKA
1. M/s Fulcrum Global Info Services LLP (called as the ‘applicant’ hereinafter), having GSTIN number 29AACFF4682P1ZQ, have filed an application for Advance Ruling under Section 97 of CGST Act, 2017 & KGST Act 2017 read with Rule 104 of CGST Rules 2017 86 KGST Rules 2017, in FORM GST ARA-01 discharging the fee of Rs.5,000/- each under the CGST Act and the KGST Act.
2. The Applicant is a private limited company and is registered under the Goods and Services Act, 2017. The applicant has sought advance ruling in respect he following question:
a) Whether the back-end support services provided by the applicant to the Juniper Inc. under the agreement would be classified as ‘Support Services’ under the Tariff Heading 9985 of Notification 11/2017 – Central Tax (Rate) dated 28.06.2017?
b) Whether the services in question would be treated as Intermediary services or not?
3. The applicant furnishes some facts relevant to the stated activity:
a. The applicant states that he is in the business of providing back-end support services to its various clients.
b. As a part of its business, the applicant states that he has entered into a Trade Compliance Services (“the agreement”) with Juniper Networks Inc., an entity located in the USA (hereinafter referred to as ‘Juniper Inc.’) which lays down terms of various services to be provided by the applicant. The Statement of Work (`SOW’) attached to the Agreement details the various services to be provided by the applicant. As per the SOW, the applicant mainly provides the services of Trade Compliance Operations Management (involving assistance and support for export compliance, import compliance, manual documentation preparation, etc.) and miscellaneous administrative support (involving responding to request for historic shipping documents, filing end user certificates, updating the compliance details, updating license details in Trade Sphere application, providing customized reports, etc.). The said agreement is accordingly for providing back office support to Juniper Inc. for various transactions undertaken by Juniper Inc.
c. The scope of services of the applicant to Juniper Inc. as details in the SOW is summarized by the herewith:
(a) Export – Import Compliance Support: To undertake various activities to day-to-day transactions of Juniper Inc. so as to ensure compliance with Bureau of Industry and Security, Department of Commerce, US. This includes screening of order, shipping documents, user registration, etc. in Juniper Inc.’s SAP application. In case of Import, the applicant is also responsible to examine import entry files, report the findings and maintain the database of all the reviewed files.
(b) Manual Documentation Support: To undertake various activities so as to provide support to Juniper Inc. in preparing the shipping and other documents in respect of their day-today transactions. This inter-alia includes assistance in preparation of (i) Shipping documents, (ii) Documentation for declaration at Customs, (iii) Documentation for movement from contract manufacturer i.e. Accton.
(c) Other administrative support:
a. Generation of reports from Oracle Application and sharing of information with Juniper Inc.;
b. To update the details of freight charges paid by Juniper Inc. on behalf of its customers in the Oracle application;
(d) It can be observed, from the above, that the services provided by the applicant to Juniper Inc. are mainly in the nature of various back office support services in relation to compliance requirements to Juniper Inc. and maintenance of information database at all times along with providing other agreed administrative support in this regard.
(e) The applicant, in terms of the agreement, raises a monthly invoice for the various services provided to juniper Inc. The entire consideration against the said invoice is received by the applicant in convertible foreign exchange.
d. The applicant refers to the Annexure to Notification 11/2017 – Central Tax (Rate) dated 28.06.2017 which provides for classification of services under Goods and Services Tax (GST). The relevant extract of the said Annexure is reproduced hereunder:
