In re GDC Dimension Data Pvt. Ltd. (GST AAR Karnataka)
What is the correct Service Accounting Code (SAC) for the services mentioned below in terms of Notification No. 11/ 2017–Central Tax (Rate) dated 28th June 2017
a. IT Support Services
b. IT Managed Services?
The Managed Services provided by the applicant have also been examined and found that they are related to the management of Data Centres, Storage infrastructures, Networks and Communication infrastructures and hence are directly related to the Group related to “information technology services” and hence is covered under the Group 99831.
The Service Code 998316 is analysed and found that this service code includes:
i. managing and monitoring a client’s IT infrastructure including hardware, software and networks;
ii. managing and monitoring communication networks and connected hardware to diagnose networking problems and gather capacity and usage statistics for the administration and fine-tuning of network traffic.
These services also remotely manage security systems or provide security related services provision of day-to-day management and operation of a client’s computer system.
The managed services offered by the applicant is verified and found that they are involved in the management of IT infrastructure including networks and hence these services squarely fall under the Service Code 998316.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, KARNATAKA
1. M/s GDC Dimesion Data Pvt. Ltd., (called as the ‘Applicant’ hereinafter), Sy.No.32/ 1, 35, 37-47, Milestone Buildcon Pvt Ltd, Off Thanisandra Main Road, Chokkanahalli Village, Yelahanka, Bangalore 560064, having GSTIN number 29AAGCG6253J1Z8, 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 8s KGST Rules 2017, in form GST ARA-01 discharging the fee of Rs.5,000-00 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 of the following question:
What is the correct Service Accounting Code (SAC) for the services mentioned below in terms of Notification No.11/ 2017 – Central Tax (Rate) dated 28th June 2017?
a. IT Support Services
b. IT Managed Services
3. The applicant furnishes some facts relevant to the stated activity:
a. The applicant states that he is a 100% subsidiary of Dimension Data Asia Pacific Pte Ltd (herein after called “DDAPPL”) based in Singapore. The ultimate parent company is NTT, a company incorporated and listed in Japan.
b. The Company has been set up in Milestone Buildcon IT SEZ in Bangalore falling under the jurisdiction of Cochin SEZ with their letter of Approval dated 07.07.2017.
c. The applicant is engaged in providing IT Technical and Support Services and IT Managed Services to its group entities located outside India. The Company has commended its operations on 15.12.2017.
d. The services provided by the company to the entities situated outside India qualifies as ‘zero-rated supply’ under section 16 of the IGST Act, 2017.
e. The details of the services for which the advance ruling is sought is as follows:
i. Support Services: This is sub-classified into two types of services as per the requirements of the customers, namely:
1. Uptime Support Services: This is a collection of four standard service plans. The nature of this support services varies as per the requirements of the customer (i.e technology vendor) and their products. Each service plan is as follows:
a. Remote Support: Support of software products for which incidents will be handled remotely.
b. Part-only support: provides delivery of parts to site from a set of service target options.
c. On-Site support: provides a complete on-site solution for either hardware or software assets
d. Mission Critical Support: elevated level of support by senior technical resources when the business is effected by downtime, saving critical time when any incidents occur.
2. Pro-active Support Services: These services assists the customers in management of their estates in a more proactive and efficient way, without relinquishing any control.
The same comprises of services namely Asset Tracking 86 Analytics Support Services, Proactive Problem Support Services, IT Service Integration, etc.
iii. Managed Services: This consists of the following services, namely:
1. Managed Service for Data Centres: includes the management of the physical servers, converged infrastructure, operating system and virtualization hypervisors. The servers may be hosted on premise, in the cloud, or in a hybrid data centre model.
2. Managed services for Storage: This service provides a reliable and scalable storage infrastructure which enhances information availability and data performance.
3. Managed Services for Enterprise Networks: Thus provides a solution with deliverables in the form of capacity management, incident management, etc.
4. Managed Services for unified communication for CISCO: This service ensures that the unified communications (UC) system continuously operates at an optimal state and is problem free and productive.
5. Managed Network Services: This portfolio supports the customer’s networking technologies, which includes the monitoring and troubleshooting of local area networks (LANs) and wide area network (WAN) technologies and WAN services.
4. The applicant states that as per his understanding, the above mentioned services needs to be classified as per the Scheme of Classification of Services provided as Annexure to the Notification No.11/2017- Central Tax (Rate) dated 28th June 2017 as amended from time to time. He also has further referred to the explanatory notes to the schemes of classification of services. Based on the above, the applicant has tabulated key categories under which the services may be classified as follows:
