♣ Name of Parent Company – A Ltd., Dubai, United Arab Emirates
♣ Name of their Indian Establishment – B Ltd. at Thane
♣ Application initially Developed & Managed by – Parent Company
♣ Service Provider – C Pvt. Ltd.
♣ Nature of Service – Enhancement & or changes to the Application
♣ Way of providing Service – These enhancements & or changes will be done by C Pvt. Ltd. staff by going to the office of B Ltd. and then deploying these enhancement & or changes on the production environment by remotely accessing their computers. The Application is mainly used in Dubai.
♣ Parent Company asked to raised Bill in their name with billing address of Dubai
♣ Amount will be paid by Parent Company in convertible foreign exchange
Issue under consideration:-
What is the nature of transaction and liability under GST if any ?
Conditions to be fulfilled to qualify as Export of Services under GST
As per IGST Act Section 2(6) “Export of services” means the supply of any service when, –
(i) the supplier of service is located in India;( C Pvt. Ltd. )
(ii) the recipient of service is located outside India;(A Ltd., Dubai )
(iii) the place of supply of service is outside India;(Dubai – Location of Recipient)
(iv) the payment for such service has been received by the supplier of service in convertible foreign exchange;
(v) the supplier of service and the recipient of service are not merely establishments of a distinct person
Zero Rated Supply [Sec.16(1) IGST Act]
“zero rated supply” means any of the following supplies of goods or services or both, namely:––
(a) Export of goods or services or both; or
(b) Supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.
OIDAR (Online Information and Database Access or Retrieval) Services
Both the following conditions must be satisfied to be an OIDAR service. If one is not satisfied, the service is not OIDAR.
i. Delivery is mediated through internet.
ii. The supply is essentially automated involving minimal human intervention and impossible without information technology.
Examples of OIDAR services:
Applicability of GST for OIDAR Services
|Location of Supplier of service||Location of recipient of service||Taxability||Forward Charge/ Reverse Charge|
(Export of service)
Place of supply for OIDAR
|Receiver||Place of supply|
|Any person||Location of the recipient of services|
On the basis of Facts and Legal provisions as mentioned above the following conclusions can be drawn:-
Disclosure – Views express above is personal and may differ person to person on the basis of knowledge and interpretation.