Page 103 - GSTL_6th August 2020_Vol 39_Part 1

2020 ] IN RE : FUTUREDENT 29
2.4 MDG is involved in organizing Trade Fairs and Exhibitions global-
ly. Its wholly owned subsidiary, MDIPL is an Indian company involved in trade
fair organizing and is a provider of trade fair related services for exhibitors and
visitors in India.
2.5 MDIPL purchased exhibition, trade and Award business and brand
name “Famdent” and “Famdent Awards” from the applicant i.e. Futuredent
(earlier known as Famdent) on Slump sale Basis. Futuredent continues to do oth-
er businesses in the same entity.
2.6 The subject application has been filed to assess whether the transac-
tion between FR and the applicant, i.e. Futuredent (earlier known as “Famdent”)
is liable to GST in India under reverse charge mechanism and, if the transaction
is concluded as a taxable supply, whether applicant would be able to claim and
utilize the input tax credit on such GST paid.
2.7 As per the scope of “supply” as mentioned in Section 7 of the CGST
Act, 2017, the transaction between the applicant and FR shall be treated as sup-
ply of services.
2.8 As per the Notification No. 10/2017-I.T. (Rate), dated 28-6-2017, in
the case of supply of service by any person who is located in a non-taxable terri-
tory to any person other than non-taxable online recipient, the liability to pay
GST shall be on the recipient of such service and such liability is to be discharged
on Reverse Charge Basis.
2.9 As laid down in Section 13(8)(b) of the IGST Act, 2017, the place of
supply of Intermediary Services shall be the location of the supplier of services.
2.9.1 A perusal of the agreement between the applicant and FR reveals
that services rendered by FR should fall under the category of “intermediary ser-
vices”, since the transaction satisfies the definition of intermediary contained in
Section 2(13) of the IGST Act, 2017, which has been reproduced by the applicant.
As per the agreement, FR shall arrange, facilitate and support direct contact and
negotiations between Famdent i.e. the applicant and the potential buyer.
2.9.2 In the subject case, the supplier of intermediary services, in this
case, FR, is located outside India and the applicant, the receiver of such services,
is located in India but the place of supply of the impugned services is outside
India as per Section 13(8)(b) of the IGST Act, 2017. Therefore the impugned ser-
vices cannot be considered as Import of services under the GST Laws. Thus,
payment to be made by the applicant to FR would not fall within the purview of
imports to attract payment of GST on a reverse charge basis by the applicant.
2.10 The second question raised by the applicant is, if at all they are re-
quired to pay GST under reverse charge basis, then whether applicant will get
ITC on such RCM paid.
2.10.1 Applicant has cited the provisions of Sections 16(1) and 2(17) of
CGST Act, 2017 and stated that they are eligible to claim the input tax credit paid
on reverse charge basis, even though, after the slump sale of exhibition business
of Futuredent, there are other business verticals remaining in the entity which
can utilize the ITC.
3. Contention - As per the jurisdictional officer :
The submissions made by the jurisdictional officer is as under :-
GST LAW TIMES  6th August 2020  103