Page 108 - GSTL_6th August 2020_Vol 39_Part 1

34 GST LAW TIMES [ Vol. 39
• Provide the support services directly to the US client from the office
premises of the Principal.
• Timesheet on the hrs. worked during the month to be provided
monthly to enable billing the US client.
• The details of the time sheet so provided was consolidated with the
timesheet provided by the other employees of the Principal working
on the project and an invoice was raised in USD on the foreign cli-
ent.
• The Principal was availing the benefit of Export of services and fil-
ings claim accordingly with the GST authorities.
• At the end of the month he was provided with the Billing in USD
and equivalent INR value by the Finance department of the Princi-
pal, based on which he used to raise invoice on the Principal in INR
terms with GST @ 18% (9% CGST + SGST @ 9%) separately.
• Post submission of the GST invoice at the scheduled date GST Re-
turn for tax payment and return were filed by him.
2.3 The applicant has further stated that as part of his contract, support
services are being provided directly to the US client by him on behalf of the Prin-
cipal. The contract contains consulting fees paid on hourly basis in USD whereas
payment is being made to him in INR. Every month the finance department of
the Principal provides the USD amount and the equivalent calculated INR
amount for which an invoice is raised by him. GST is charged separately on this
Invoice so raised. He pays the GST on a monthly basis and file his GST returns
on a quarterly basis.
2.4 On the interpretation of the GST rules in force, the applicant has
stated that the place of Principal supplier is in Chennai, Tamilnadu where it is
registered and his consulting services is also provided out of Chennai, Tamilna-
du where he is also registered. The services provided to the foreign supplier are
treated as Export of Services and accordingly the Principal is availing the benefit
of export under IGST Rules. The applicant is also providing the services directly
to the foreign client by paying GST under CGST and SGST through the Principal.
A plain reading of the definition of ‘agent’, ‘supplier’ and ‘Principal’ amply
makes it clear that his role is that of a agent when discharging his services to the
foreign client representing the Principal as an agent.
2.5 “export of services” means the supply of any service when, -
(i) the supplier of service is located in India;
(ii) the recipient of service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of
service in convertible foreign exchange; and
(v) the supplier of service and the recipient of service are not merely es-
tablishments of a distinct person in accordance with Explanation 1
in Section 8;
The meaning of supplier covered under the definition of export of services above
in 2(6)(i)-(iii) includes the agent as well. So by extension conditions (i), (ii) and
(iii) are already fulfilled in his case as the Principal is availing the benefit of Ex-
port of Services. Conditions 2(6)(iv) in the definition above refers to payment for
the services rendered has to be received in Convertible Foreign Exchange. In the
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