Case Law Details
In re Stovec Industries Ltd. (GST AAAR Gujarat)
Supply of service sub-contracted by recipient company cannot be considered as ‘intermediary’
The AAAR, Gujarat, in the matter of M/S. Stovec Industries Ltd. [Advance Ruling No. GUJ/GAAAR/APPEAL/2021/32 dated November 2, 2021] modified the ruling passed by the AAR, Gujarat and held that, supply of installation/up-gradation of machines and training services for and on behalf of the Company located outside India, by the supplier in India will not fall under the definition of ‘intermediary’.
Facts:
M/s. Stovec Industries Ltd. (“the Appellant”) is the supplier of products in textile and graphics printing market and engaged in manufacturing rotary screen printing machine, installation and servicing of the machines, and also offers products for conventional and digital engraving methods. The Appellant entered into a contract with SPG Prints Austria GMBH (“SPA”) to provide particular services to customers of SPA in India, as per SPA’s instruction, that includes installation / up-gradation of machines sold by SPA, training at SPA’s customers’ site etc., and in return the Appellant receives commission as consideration in convertible foreign currency periodically for service contracts sold in India from SPA. Further, The Appellant would raise invoice on SPA on the basis of number of hours spent on supply of service in terms of the said contract on the agreed rates.
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