Page 143 - GSTL_2nd April 2020_Vol 35_Part 1

2020 ] SUTHERLAND MORTGAGE SERVICES INC. v. PR. COMMR. OF CUS., CGST & C. EX. 45
Provided that the intra-State supply of services shall not include supply of
services to or by a Special Economic Zone developer or a Special Economic
Zone unit.
Explanation 1. - For the purposes of this Act, where a person has, -
(i) an establishment in India and any other establishment outside India;
(ii) an establishment in a State or Union territory and any other estab-
lishment outside that State or Union territory; or
(iii) an establishment in a State or Union territory and any other estab-
lishment being a business vertical registered within that State or
Union territory,
then such establishments shall be treated as establishments of distinct persons.
Explanation 2. - A person carrying on a business through a branch or an
agency or a representational office in any territory shall be treated as hav-
ing an establishment in that territory.”
(Emphasis supplied).
9. In the instant case, the specific plea of the petitioner is that the “re-
cipient of service” is a customer located outside India and that the petitioner In-
dia branch renders services to those customers outside India under the intra-
company agreement entered into by the India branch with the principal compa-
ny incorporated in USA and that therefore, the services are rendered by the peti-
tioner India branch directly to the overseas customers and not to the principal
company incorporated in USA. It is thus pointed out by the petitioner that the
services in question are rendered by the petitioner India branch directly to the
customers located outside India and such services are thus consumed by such
customers located outside India. It is pointed out that as the petitioner India
branch is thus not directly rendering service to the principal company incorpo-
rated in USA (but directly to the customers located outside India) the restriction
in clause (v) of Section 2(6) of the IGST Act read with Explanation 1 of Section 8
of the IGST Act cannot be pressed into service against the petitioner and that
therefore the service in question would eminently and fully fulfill the definition
of “export of services” as defined in Section 2(6) of the IGST Act. In that regard it
is pointed out by the petitioner that if the petitioner India branch had directly
rendered the service to its principal company incorporated in USA and thereaf-
ter, the latter had in turn made available those services to the customers located
outside India, then the scenario would have been different, etc.
10. After consideration of these aspects, and also more particularly, the
definition of “export of service” as per Section 2(6) of the IGST Act, the Advance
Ruling Authority has proceeded to observe on page 4 of the impugned Ext.P-2
order that one of the important requirements of supply of any service to be treat-
ed as ‘export of service’ is that the place of supply of service must be outside In-
dia. The provisions for determination of the place of supply of services where the
location of the supplier of services or location of recipient of services, is outside
India, are contained in Section 13 of the IGST Act.
11. In this regard, it may also be apposite to refer to the definition of
“import of service” as per Section 2(11) of the IGST Act, which provides as fol-
lows :
“Section 2(11) “import of services” means the supply of any service, where -
(i) the supplier of service is located outside India;

GST LAW TIMES  2nd April 2020  207