Page 96 - GSTL_23rd April 2020_Vol 35_Part 4

422 GST LAW TIMES [ Vol. 35
(c) The applicant company identifies the customers in India, by using
their sales representative/personnel and refers the said customers
to the parent company in Italy.
(d) The applicant stocks & sells the small and medium category of ma-
chines, that have been imported, to Indian customers.
(e) The applicant also books the orders for bigger machines which are
advanced Automated CNC Machines, which are directly sup-
plied/shipped to the identified Indian customers by the parent
company in Italy. The applicant is not involved in import of the said
machines.
(f) The applicant gets sales commission/marketing fee as per clause
envisaged in the agreement by the parental company for booking of
the direct supply orders.
6. Findings & discussion :
6.1 We have considered the submissions made by the Applicant in their
application for advance ruling as well as the submissions made by Sri Parvatha-
raj S.B., Authorised Representative of the applicant, during the personal hearing.
We have also considered the issues involved, on which advance ruling is sought
by the applicant, and relevant facts.
6.2 At the outset, we would like to state that the provisions of both the
CGST Act and the KGST Act are the same except for certain provisions. There-
fore, unless a mention is specifically made to such dissimilar provisions, a refer-
ence to the CGST Act would also mean a reference to the same provisions under
the KGST Act.
6.3 We observe, on perusal of the information furnished by the appli-
cant, that they are involved in three business activities i.e. (i) they import the ma-
chines in their own name, stocks the same and sells the machines, (ii) they book
the orders for the parent company M/s. Fom Industrie s.r.l., Italy for sale of ma-
chines & earns sales commission, and (iii) identifies the probable customers for
M/s. Universal Pack s.r.l., Italy by marketing their products and earns monthly
4000 euros irrespective of the result of the said marketing.
6.4 Now, with this background understanding of the business of the
applicant, we proceed to consider & answer each question at a time. We take up
the first question, which reads as under :
1. “is our export of services attracts IGST under RCMT?”.
The applicant seeks advance ruling on the issue that whether their export of ser-
vices attract IGST under RCM. The Reverse Charge Mechanism is nothing but
shifting the tax liability on to the receiver. In the instant case the applicant is, un-
doubtedly, a supplier and hence the question of levy of IGST on export of ser-
vices, under RCM, does not arise.
6.5 The second question reads as “Is our services considered as Intermedi-
ary Services?”. The instant question is in relation to the second and third type of
business activities. We proceed to examine these business activities.
(a) The applicant, as an agent of their parent company M/s. Fom In-
dustrie s.r.l, Italy, books the orders from the Indian Customers for
Advanced Automated CNC Machines, which are supplied directly
to the Indian Customers by their parent company in Italy. The ap-
plicant gets sales commission for the direct sales orders booked. The
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