Case Law Details

Case Name : In re Hilti Manufacturing India Pvt.Ltd. (GST AAR Gujarat)
Appeal Number : Advance Ruling No. GUJ/GAAR/R/26/2021
Date of Judgement/Order : 09/07/2021
Related Assessment Year :

In re Hilti Manufacturing India Pvt.Ltd. (GST AAR Gujarat)

On careful reading of the Service contract between the applicant and service receiver, applicant’s submissions, even those during the personal hearing, we find that goods were sent by Hilti Aktiengesellschaft (hereinafter referred to as recipient) to the applicant which are required to be made physically available to the applicant, so that applicant conducts various tests and RD activities on the said goods and prepare the results and supply the subject service to the recipient. We find this situation is covered at Section 13(3)(a) of IGST Act. Thus, as per said section 13(3)(a) of IGST Act, the place of supply of the following services shall be the location where the services are actually performed, i.e. location of the applicant. As the services provided by the applicant are in the form of R&D activity undertaken on the sample goods provided by the recipient i.e. the sample goods have to be made physically available by the recipient to the applicant in order to enable the applicant to provide the services. Therefore, the place of supply of service in the present case will be the location where the services are actually performed. The place of supply of services is therefore, Gujarat.

Further, Section 8(2) of the IGST Act, 2017 provides that in case of supply of services where the location of the supplier and the place of supply of services are in the same State, it shall be treated as intra-state supply.

Section 2(6)(iii) IGST Act stipulates that for ‘Export of service’ to be satisfied one of the conditions is place of supply should be outside India. This condition is not satisfied in subject case.

Acronym for Goods and Services Tax, in wooden alphabet letters with text on shadows

FULL TEXT OF THE ORDER OF AUTHORITY OF ADVANCE RULING, GUJARAT

A. BRIEF FACTS

The applicant, M/s. Hilti Manufacturing India pvt.ltd., is engaged in the manufacture and supply of diamond cutting tools and other innovative tools required by the construction industry such as Diamond wheels, Diamond core bit drill, Grinding wheels, Grinding plate, Easy cut diamond segments, Flange Barrel and Frame Straw/Gang saw blades. The Hilti Group purchased 80 percent of the India-based Bhukhanvala Diamond Systems private limited, which was founded in 1971 and the company was renamed in 2010, when complete ownership was achieved with the purchase of the remaining minority shares which were previously held by the founding family. The applicant has additional manufacturing facilities located at Plot NO.244 to 251, 48 and 29(Unit-I) and Plot No.C-IB, 53/54-1&2, GIDC Industrial estate, Sisodra, Navsari(Unit-3).

2. The applicant has submitted that they have been granted approval from Development Commissioner(KASEZ) to operate as an 100% Export Oriented Unit (‘EOU’) vide permission dated 17-8-92; that they have been granted permission as per LUT as an 100% EOU to manufacture products such as Easicut diamond impregnated segments, Easicut diamond segmented saw, Continuous type saw, Turbo Type saw, Diamond core bit drills, Aluminium Flange for diamond wheels, Copper washers and blister moulds; that they have been granted license for private bonded warehouse under 100% EOU Scheme bearing License No.2/93 with the additional premises Unit-1 and Unit-3 being included in the said license vide amendment to the license dated 2-12-20 10 and the license has been renewed from time to time.

3. The applicant has further submitted that they have a separate R&D unit wherein research and development activities are carried out for their own purposes as well as for other customers; that the applicant is carrying out R&D activities on behalf of entities situated outside India i.e. the applicant is carrying out such R&D activities on the product samples/goods sent by the foreign entities for R&D purposes and submits a detailed report to them thereafter.

4. The applicant has submitted that they have entered into an agreement with Hilti Aktiengesellschaft, located at Feldkircherstrasse 100, Postfach 333, Principality of Liechtenstein, 9494 FL-9494, Leichtenstein for carrying out various R&D activities on the product samples provided to the applicant in India. A copy of the agreement is submitted by the applicant as Annexure- 1; that as per the terms of the said agreement, the applicant is conducting tests on various products, providing product development and engineering services such as conducting benchmark testing and feasibility studies, analyzing data and targets, designing the products, making prototypes, verifying and validating the process and product to foreign company; that all the results of these activities undertaken by the applicant are then provided to the foreign company comprising of findings, performances, parameters, know-how, inventions, developed processes, objects and programs in the form of a report and an illustrative copy of such an R&D report has been submitted as Annexure-2.

5. As per the agreement, the testing activities related to the Hilti items, specified in detail by the applicant are as follows:

  • Standard performance test-GCS
  • Grinding cup wheel-4” to 7”.
  • Cutting blades-handheld 4” – 16”.
  • Slitting blades-handheld 5” – 7”.
  • Standard performance test-floor saw blades – 12” -24”.
  • Standard performance test-bench saw blades – 12” – 20”.
  • Standard performance test-Core bits.
  • Misuse/Robustness test-GCS.
  • Other testing activities as agreed between the parties from time to time.

5.1 Product development and engineering related to Hilti items, specified in detail by the applicant are as follows:

  • Defining the project.
  • Conducting the benchmark testing and feasibility studies.
  • Analyzing data and targets(performance and cost).
  • Designing the product and its requirements.
  • Making prototypes and conducting performance testing till reach the
  • Verifying and validating the process and product.
  • Other product development and engineering activities as agreed between the parties from time to time.

5.2 The applicant has submitted that they raise periodic invoices of such services provided by them on the foreign customer and the consideration is received by the applicant in foreign currency; that the invoices raised by them presently are inclusive of IGST at the rate of 18% on the taxable value of the R&D services provided to the foreign company and are thus making payment of IGST on the R&D services provided to foreign companies. They have submitted illustrative copy of the invoice and bank realization certificate marked as Annexure-3. The applicant is of the view that the services provided by them falls under ‘export of service’ and is thereby exempted from tax liability under IGST Act, 2017. The applicant wants to know: (i) whether the services provided by the applicant to the entities located outside India is covered under Section 13(2) of the Integrated Goods and Services Tax Act, 2017? Or (ii) Whether the services provided by the applicant is liable to CGST and SGST or IGST or is eligible to be treated as a ‘zero rate supply’ under Section 16 of the IGST Act, 2017.

6. The applicant has submitted that the questions on Advance Ruling raised by him are covered under sub-sections (2)(e) & (2)(g) of Section 97 of the CGST Act, 2017. The applicant have relied on the judgement of the Hon’ble High Court of Kerala in the case of Sutherland Mortgage Services Inc.vs.Pr.Commr., CGST, Customs and Central Excise, Kochi and Anr. Reported in 2020(3)TMI 186 to support their aforementioned view. They have also referred to various decisions which relied on the aforementioned judgement of the Hon’ble Kerala High Court i.e. (i) M/s. Prettl Automotive India pvt.ltd., 2020(12)TMI 836-AAR Maharashtra . (ii) M/s. Amogh Ramesh Bhatawadekar, 2020(12)TMI 786-AAR Maharashtra. (iii) M/s. Stovec Industries ltd. 2021(1)TMI 544-AAR Gujarat, to support their above view.

6.1 The applicant has stated that the activity carried out by them amounts to ‘service’ in terms of Section 2(102) of the CGST Act, 2017; that the term ‘supply’ has been defined under Section 7 of the CGST Act, in an inclusive manner and is defined in such a way, as to include all forms of supply(subject to certain exclusions) of goods or services or both for a consideration made in course or furtherance of business; that as per Oxford Advanced Learner’s Dictionary, ‘supply’ as a verb is defined as “to make available for use or to provide something to someone’ and in the Cambridge dictionary as “to provide something that is wanted or needed”; that the activity of scientific research and development carried out by the applicant is not movable property and hence cannot qualify as ‘goods’; that ‘service’ is defined under Section 2(102) of the CGST Act in such a way to include any activity other than goods, hence the activity of providing scientific research and development would qualify as service under CGST.

6.2 The applicant has submitted that R&D services provided by the applicant would qualify as zero-rated supply in terms of Section 16 of the IGST Act, 2017; that Section 7(5) of the IGST Act, 2017 provides that the supply of service shall be treated as a supply of service in the course of inter-State trade or commerce when the supplier is located in India and the place of supply is outside India and that as per Section 2(23) of the IGST Act, ‘zero-rated supply’ shall have the meaning assigned to it in Section 16 of the IGST Act. Section 16 of the IGST Act, defines zero-rated supply as under:

“16. (1) “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.

(2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply.

(3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:––

(a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or

(b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied,

in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder.”

The applicant has stated that based on the above, the export of service shall qualify as ‘Zero rated supply’ and can be supplied without payment of IGST and even if a supply is in the course of inter-state trade or commerce, the same can be supplied without payment of IGST if it qualifies as an export of service.

6.3 The applicant has submitted that the following conditions as specified in terms of Section 2(6) of the IGST Act, have to be satisfied, for a supply of service to qualify as export of service.

“(6) “export of services” means the supply of any service when,––

(i) the supplier of service is located in India;

(ii) the recipient of service is located outside India;

(iii) the place of supply of service is outside India;

(iv) the payment for such service has been received by the supplier of service in convertible foreign exchange; and

(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8;”

6.4 The terms ‘recipient of service’ and ‘supplier of service’ are defined under Section 2(93) and Section 2(105) of the CGST Act, 2017 respectively and read as under:

“(93) “recipient” of supply of goods or services or both, means—

(a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration;

(b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and

(c) where no consideration is payable for the supply of a service, the person to whom the service is rendered,and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied;”

“(105) “supplier” in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied;”

6.5 The applicant has submitted that the services provided by them fulfils all the conditions under Section 2(6) of the IGST Act, 2017 as under, and the said services thereby qualify as an ‘export of service’:

Sr. No. Particulars of Section 2(6) Relevant section to be referred. Application in the facts of present case.
(i) The supplier of    service is located in India. Section 2(93) of CGST Act and 2(15) of the IGST Act. Applicant is located in India.
(ii) The recipient of   service is located outside India. Section 2(105) of CGST Act and Section     2(14) of the IGST Act. The Recipient of service are foreign companies located outside India.
(iii) The place of supply of service is outside India. Section 13(2) of the IGST Act. The place of supply is location of recipient, which is foreign company in the present case.
(iv) The payment for such service has been received by the supplier of service in
convertible foreign exchange.
  The applicant has received the payment in convertible  foreign exchange.
(v) The supplier of service and the recipient of service   are not merely establishments of a distinct person in accordance with Explanation 1 in Section 8.   Applicant(supplier of service) and Foreign university(recipient of service) are not merely establishment of a distinct person.

7. The applicant has submitted that while the location of the applicant is in India in terms of Section 2(15)(a) of the IGST Act, the recipient of services (i.e. foreign companies) are located outside India in terms of Section 2(14) (d) of the IGST Act. They have stated that a bare perusal of Section 13 of the IGST Act would reveal that generally the place of supply of services shall be the location of the recipient of services in terms of Section 13(2) of the IGST Act, except in case of the services specified in sub-sections (3) to (13) of Section 13 of the IGST Act. Relevant part of Section 13 of the IGST Act reads as follows:

“13. (1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India.

(2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services:

Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services.

(3) The place of supply of the following services shall be the location where the services are actually performed, namely:—

(a) services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services:

Provided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services: Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs and are exported after repairs without being put to any other use in India, than that which is required for such repairs;

(b) services supplied to an individual, represented either as the recipient of services or a person acting on behalf of the recipient, which require the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services.

(4) The place of supply of services supplied directly in relation to an immovable property, including services supplied in this regard by experts and estate agents, supply of accommodation by a hotel, inn, guest house, club or campsite, by whatever name called,grant of rights to use immovable property, services for carrying out or co-ordination of construction work, including that of architects or interior decorators, shall be the place where the immovable property is located or intended to be

(5) The place of supply of services supplied by way of admission to, or organization of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place where the event is actually held.

(6) Where any services referred to in sub-section (3) or sub-section (4) or sub-section (5) is supplied at more than one location, including a location in the taxable territory, its place of supply shall be the location in the taxable territory.

(7) Where the services referred to in sub-section (3) or sub-section (4) or sub-section (5) are supplied in more than one State or Union territory, the place of supply of such services shall be taken as being in each of the respective States or Union territories and the value of such supplies specific to each State or Union territory shall be in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed.

(8) The place of supply of the following services shall be the location of the supplier of services, namely:––

(a) services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders;

(b) intermediary services;

(c) services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month.

Explanation.––For the purposes of this sub-section, the expression,––

(a) “account” means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account;

(b) “banking company” shall have the same meaning as assigned to it under clause (a) of section 45A of the Reserve Bank of India Act, 1934;

(c) ‘‘financial institution” shall have the same meaning as assigned to it in clause (c) of section 45- I of the Reserve Bank of India Act, 1934;

(d) “non-banking financial company” means,––

(i) a financial institution which is a company;

(ii) a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or

(iii) such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette, specify.

(9) The place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods.

(10) The place of supply in respect of passenger transportation services shall be the place where the passenger embarks on the conveyance for a continuous journey.

(11) The place of supply of services provided on board a conveyance during the course of a passenger transport operation, including services intended to be wholly or substantially consumed while on board, shall be the first scheduled point of departure of that conveyance for the journey.

(12) The place of supply of online information and database access or retrieval services shall be the location of the recipient of services.

Explanation.––For the purposes of this sub-section, person receiving such services shall be deemed to be located in the taxable territory, if any two of the following non contradictory conditions are satisfied, namely:––

(a) the location of address presented by the recipient of services through internet is in the taxable territory;

(b) the credit card or debit card or store value card or charge card or smart card or any other card by which the recipient of services settles payment has been issued in the taxable territory;

(c) the billing address of the recipient of services is in the taxable territory;

(d) the internet protocol address of the device used by the recipient of services is in the taxable territory;

(e) the bank of the recipient of services in which the account used for payment is maintained is in the taxable territory;

(f) the country code of the subscriber identity module card used by the recipient of services is of taxable territory;

(g) the location of the fixed land line through which the service is received by the recipient is in the taxable territory.

(13) In order to prevent double taxation or non-taxation of the supply of a service, or for the uniform application of rules, the Government shall have the power to notify any description of services or circumstances in which the place of supply shall be the place of effective use and enjoyment of a service.”

7.1 The applicant has submitted that sub-sections(3) to (13) of Section 13 of the IGST Act are irrelevant in the present case for the purpose of determination of the ‘place of supply’ of the services provided by the applicant to foreign companies. In the instant case, the applicant has entered into a contract with Hilti Aktiengesellschaft, pursuant to which, the Applicant is carrying out R&D services on the sample goods provided by the foreign company which is located outside India and in this regard, Section 13(3)(a) of the IGST Act, inter alia states that place of supply of service shall be the location where services are performed in case service is supplied in respect of goods which are required to made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services.

7.2 The applicant has placed reliance on the decision of Principal Commissioner of Central Excise Pune-I vs. Advinus Therapeutics ltd., 2016- TIOL-3138-CESTAT-MUM, wherein there was a similar issue pertaining to provision of scientific or technical consultancy service to foreign clients by the assessee. It was held therein that even if some of the activities are carried out in India, by no stretch can it be asserted that the fulfillment of the activity is in India. Therefore, it was concluded that the location of the actual performance of the service is outside India and, even with the specific provision of Rule 4, POPS Rules, 2012, the performance of service being rendered outside India would render it to be an export. The goods supplied to the assessee, minor though in proportion may be, are subject to alteration in the course of research. It is not asserted anywhere that these goods, in its altered or unaltered form, are sent back to the service recipient; if it were, the provisions of the Customs Act, 1962 would be invoked to eliminate tax burden. If the goods cease to exist in the form in which it has been supplied, it cannot be said that services have been rendered on the goods even if it cannot be denied that the services have been rendered on the goods. Consequently, the provisions of Rule 4(1) are not attracted and, in terms of Rule 6A of the Service Tax Rules, 1994, the definition of export of services is applicable thus entitling the assessee to eligibility under Rule 5 of the Cenvat Credit Rules, 2004.

7.3 The applicant has submitted that the aforesaid judgement was relied on in the case of Indeus Life Science Pvt.ltd. vs. CCE, Pune-II, 20 19(370) ELT 678(Tri-Mumbai) as it was based on identical facts and that it is a settled principle of law that when the service is consumed outside India, tax is not leviable in India. The applicant has placed reliance on the following cases wherein it has been specifically held that even though the test has been conducted in India and the test reports were prepared in India, the service will be treated as export of service as the service is consumed outside India.

  • Commissioner vs. B.A.Research India ltd. 2010(18)STR.439-2009(1 1)TMI 2 13-CESTAT, Ahmedabad.
  • KSH International pvt.ltd. vs. Commissioner 2010(18)STR.404-2010 (1)TMI 143-CESTAT, Mumbai.
  • Commissioner of Central Excise, Pune-I vs. Sai Life Sciences 2016(42) 882 (Tri-Mum) -2016(2) TMI 724-CESTAT, Mumbai-Post introduction of Place of Provision of Service Rules 2012.

7.4 The applicant has submitted that in the case of Commissioner vs. B.A.Research India ltd. 2010(18)STR.439, it was held that the performance of testing and analysis has no value unless and until it is delivered to its client and delivery of report to its client is an essential part of the service, which was delivered and used outside India, therefore it should be construed as export of service. The applicant has further submitted that in the instant case, the samples got consumed in the process of R&D and accordingly, in light of the submissions and legal decisions cited hereinabove, the place of supply in case of R&D services would be the location of the service recipient in terms of Section 13(2) of the IGST Act and the service recipient being a foreign entity located outside India, the place of supply of service would be outside India. The applicant has stated that there is no dispute that the payment for such service has been received by the applicant in convertible foreign exchange and the applicant and the recipient of service (i.e. foreign company) are not merely establishments of a distinct person in accordance with Explanation 1 in Section 8 of the CGST Act. The applicant has concluded his submission by stating that in light of the above cases and provisions of law, the services provided by the applicant falls under ‘export of service’ as per the definition under Section 2(6) of the IGST Act, 2017, hence the services provided by the applicant amounts to zero-rated supply in terms of Section 16 of the IGST Act. The applicant has also submitted photocopies of the various sections of the CGST/IGST Acts referred to by them as well as the photocopies of the judgements relied upon by them, on 29-6-21. The applicant has relied upon the decision of PCCCE vs. Advinus Therapeutics ltd. 2016(12)TMI 34-CESTAT Mumbai as well as the decision of Advance Ruling Authorities of Gujarat in the case of Manoj Bhagwan Mansukhani(M/s. Rishi Shipping) 2021 (4)TMI-564 in support of their contention.

B. Question on which Advance Ruling sought?

(i) Whether the services provided by the applicant to the entities located outside India is covered under Section 13(2) of the Integrated Goods and Services Tax Act, 2017?

(ii) Whether the services provided by the applicant is liable to Central Goods and Service Tax and State Goods and Service Tax or Integrated Goods and Services Tax or is it eligible to be treated as a ‘zero rated supply’ under Section 16 of the Integrated Goods and Services Tax Act, 2017.

C. Personal Hearing:

8. Shri Jigar Shah, CA appeared for personal hearing through virtual mode (Video Conferencing) on 30-6-21. On being specifically asked as to whether the applicant was supplying subject services i.e. carrying out R&D activities by only working on the goods provided by the Hilti Aktiengesellschaft and whether they were providing any other independent services besides this, he clarified that the subject services supplied by the applicant was only as a result of analysis carried out on goods provided by the Hilti Aktiengesellschaft, after which a detailed report was submitted to the said recipient.

FINDINGS:

9. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and GGST Act, 2017 are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the GGST Act.

10. We have carefully considered all the submissions made by the applicant.

11. On careful reading of the Service contract between the applicant and service receiver, applicant’s submissions, even those during the personal hearing, we find that goods were sent by Hilti Aktiengesellschaft (hereinafter referred to as recipient) to the applicant which are required to be made physically available to the applicant, so that applicant conducts various tests and RD activities on the said goods and prepare the results and supply the subject service to the recipient. We find this situation is covered at Section 13(3)(a) of IGST Act. Thus, as per said section 13(3)(a) of IGST Act, the place of supply of the following services shall be the location where the services are actually performed, i.e. location of the applicant. As the services provided by the applicant are in the form of R&D activity undertaken on the sample goods provided by the recipient i.e. the sample goods have to be made physically available by the recipient to the applicant in order to enable the applicant to provide the services. Therefore, the place of supply of service in the present case will be the location where the services are actually performed. The place of supply of services is therefore, Gujarat.

11.1. Further, Section 8(2) of the IGST Act, 2017 provides that in case of supply of services where the location of the supplier and the place of supply of services are in the same State, it shall be treated as intra-state supply.

11.2 Section 2(6)(iii) IGST Act stipulates that for ‘Export of service’ to be satisfied one of the conditions is place of supply should be outside India. This condition is not satisfied in subject case.

12. The applicant has submitted case laws pertaining to the Service Tax era citing the Place of provision of Service Rules, 20 12( POPS). These case laws find no applicability in the GST era wherein the place of supply in subject case shall be determined as per Section 13 of IGST Act, an Act enacted by competent Union Legislature. The POPS Rules have no standing and legality in subject GST matter and we note that the applicant has placed misplaced reliance thereof.

13. The applicant has relied upon a decision of Advance Ruling in case of M/s. Manoj Bhagwan Mansukhani (M/s.Rishi Shipping) (Order No. GUJ/GAAR/ R/ 12/202 1 dated 27-1-21) of the Authority of Advance Ruling, Gujarat. We find that the facts of said Advance Ruling and facts of subject matter are different. The referred Advance ruling facts involves whether services supplied by that applicant such as- stevedoring, transportation of the fertilizers from the vessel to the warehouse and services rendered such as storage, bagging, stuffing of the said fertilisers at the custom bonded warehouse, then removal of the said goods from the custom bonded warehouse by again transporting the goods from the custom bonded warehouse as per requirement of the client and dispatch of cargo for export, qualify to be export of services. There is no identical/similarity in the facts with the present case, where sample goods are sent by the foreign service recipient to the applicant and the goods are worked upon for RD activities and results are supplied to the recipient, here there is no returning the goods, infact the applicant submitted that the sample goods sent for RD activities tests are consumed in the process of testing/activities. Further, as per the provisions of Section 103 of the CGST Act, 2017, the Advance Ruling shall be binding only on the applicant who had sought it in respect of any matter referred to in Section 97(2), CGST Act and the concerned officer/ jurisdictional officer in respect of the applicant.

14. In Conspectus of above findings, we issue the Ruling:

RULING

(i) The subject services do not merit to be covered under Section 13(2), IGST Act.

(ii) The subject services are liable to CGST and SGST.

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