Page 140 - GSTL_2nd April 2020_Vol 35_Part 1

42 GST LAW TIMES [ Vol. 35
former principal company) in order to provide services to customers outside In-
dia. It appears that the above intra-company agreement has been entered into
only for the purpose of transfer pricing regulations and the petitioner, which is
only a branch of the principal company, has no separate legal existence apart
from the principal company and that the petitioner, which is only a branch, has
no separate legal existence and that the legal entity is the principal company.
That M/s. Sutherland Mortgage Services Inc. USA has also entered into agree-
ment with customers outside India for providing services from the USA and In-
dia branch. That the principal company incorporated in USA is reimbursing the
branch at India for the costs incurred to perform the services and the branches
like the petitioner issue commercial invoice to the corporate head office at USA.
It is pointed out that the services are provided by the petitioner branch directly
to the customers located outside India and that the petitioner branch is not
providing those services to the head office in USA and that therefore, those ser-
vices would eminently qualify as ‘Exporter services” which is considered zero-
rated supply as envisaged in Section 16 of the Integrated Goods & Services Tax
Act, 2017 (IGST Act). On this premise, the petitioner has filed Ext. P-1 application
for advanced ruling under Section 97 of the Central Goods & Services Tax [Act],
2017 (CGST Act) and the Kerala Goods & Services Tax Act, 2017 read with Sec-
tion 20 of the IGST Act, 2017, Rule 104 of the CGST Rules, 2017 and the Kerala
GST Rules, 2017. The Advance Ruling authority as per the impugned Ext.P-2 or-
der [2019 (26) G.S.T.L. 285 (A.A.R. - GST)] has held that the advance ruling as
sought for in Ext.P-1 application cannot be granted as the issue of “determination
of place of supply”, does not come within the permissible issues to be deter-
mined by the Advance Ruling Authority in terms of Section 97(2) of the CGST
Act, 2017 and therefore the Advance Ruling Authority lacks jurisdiction to enter-
tain Ext.P-1 application. It is pointed out that Section 100 of the CGST Act pro-
vides for a statutory appeal before the appellate authority concerned only if the
impugned advance ruling is rendered under Section 98(4) of the CGST Act and
not against the order of rejection as in the nature of Ext.P-2 herein, which has
been purportedly issued under Section 98(2) of the CGST Act, wherein the plea
for advance ruling is rejected at the threshold stage. The point on which ad-
vanced ruling has been sought for by the petitioner is on the following aspects :
“Whether supply of services by India Branch of Sutherland Mortgage
Services Inc. USA to the customers located outside India shall be liable to
GST in the light of the intra-company agreement entered into by the said
branch with the principal company incorporated in USA?”
(It appears that Ext. P-1 application and the impugned Ext. P-2 order use the
word, “Inter-company agreement” and now it appears that it is common ground
that the said usage is a misnomer and the correct expression in that regard, in the
context of the case of the petitioner should actually be “intra-company”, as the
specific case of the petitioner is that the petitioner is only a branch of the princi-
pal company incorporated in USA and that latter alone is the separate legal enti-
ty, whereas the former does not have any separate legal existence, as it is only a
branch of the principal incorporated in USA.).
4. It has been noted in the impugned order that as per the contract en-
tered into by the principal company incorporated in USA with the customer lo-
cated outside India and the India branch provide services directly to the custom-
ers located in USA from India and that the petitioner branch is the service pro-
vider and that the customers concerned located outside India are the recipient.

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