Page 123 - GSTL_2nd July 2020 _Vol 38_Part 1

2020 ] IMPORT EXPRESS INDIA PVT. LTD. v. COMMR. OF CGST, MUMBAI CENTRAL 41
Company. The appellants are providing various services categorised under
“Business Auxiliary Services” to their Parent Company, such as collecting of
payments from their customers on behalf of the Parent Company, co-
coordinating with Courier Company, customer support service etc. and for the
said services they are being paid service charges in the form of commission by
their Parent Company as per Clause 4 of the service agreement. The said Clause
4 of the service agreement is extracted as under :
“Clause 4. Compensation for Services
The Company shall pay to Import Express compensation for the services as
follows :
The service provided in Annexure ‘A’ shall be the cost incurred by
Import Express for providing these services plus 4%
Import Express shall invoice the Company on a monthly basis. All
such payments shall be made by the Company within 7 days from
the date of the receipt of such invoice. The amount owed for ser-
vices rendered by Import Express on behalf of the company may be
netted off against the receivables of the company collected by Im-
port Express on behalf of the company.”
3. Although the customers made online payment to the Parent Compa-
ny for the products purchased by them but many times they made payment for
the Parent Company’s products to the appellant in India and the appellant in
turn after deducting their service charge/commission in terms of Clause 4 of the
Service Agreement, transfer the remaining amount to the Parent Company at
Singapore through banking channel. In other words, the appellant remits the net
charge to the Parent Company after deducting its service charges/commission.
For the period from July, 2011 to September, 2011 the appellant had filed refund
claim of ` 5,09,803/- under the Export of Services Rules, 2005 for rebate of Ser-
vice Tax paid on export of services. The same was rejected by the Adjudicating
Authority vide Order-in-Original dated 19th January, 2016. On appeal, the
Learned Commissioner GST & Central Excise, Thane (Rural), Mumbai vide the
impugned order dated 20th February, 2018, also dismissed the same.
4. I have heard Learned Chartered Accountant for the appellant and
Learned Authorised Representative for the Revenue and perused the record. Ac-
cording to the Learned Chartered Accountant, the appellant recovered consid-
eration of sale of goods from local customers of the Parent Company and thereaf-
ter remits the net consideration to its Parent Company after deducting their ser-
vice charges. He further submitted that had the entire amount received from the
customer of Parent Company been remitted to Parent Company, the service
charges due to appellants in foreign exchange would have been paid by Parent
Company from abroad. But instead of going by this lengthy process the appel-
lant paid only the net consideration in foreign exchange to the Parent Company
and therefore in a way the appellant has saved the foreign exchange. In other
words, it is deemed that the appellant has received entire consideration for their
service charges in convertible foreign exchange as required by the Export of Ser-
vices Rules, 2005. He also relied upon the decision of the Tribunal (Principal
Bench, Delhi) in the matter of National Engineering Industries Ltd. v. CCE, Jaipur -
(2008) TIOL 939 = 2008 (11) S.T.R. 156 (Tribunal) wherein this Tribunal has held
that receipt of consideration received in Indian Rupees in lieu of foreign ex-
change is eligible for benefit of exemption under Export of Services Rules, 2005.
GST LAW TIMES  2nd July 2020  123