Page 109 - GSTL_6th August 2020_Vol 39_Part 1

2020 ] IN RE : RAJESH RAMA VARMA 35
real world of business there are entities who export service and bill the services
rendered in INR and receive INR as consideration. Under the Foreign Exchange
Management Act it is provided that if the payment in India rupees is received in
India through banking channel it is deemed to be convertible foreign exchange.
In the present case the Principal is claiming export of services arid a part of the
services is being provided by the applicant directly to the foreign client. The
payment is received by the principal in USD from the foreign client. The contract
between the applicant and the Principal is in USD , but payment is made to me in
INR. The applicant has relied on the following case laws passed by CESTAT on
similar issues in the erstwhile Service Tax Act where the question of inward re-
mittance for export proceeds in INR was dwelled at length and decided to be
treated as receipt of payment in convertible foreign exchanges.
(1) National Engineering Industries Ltd. v. Commissioner of Central Excise,
Jaipur (CESTAT Delhi) - CESTAT (815) CESTAT Delhi (278) = 2011
(24) S.T.R. 683 (Tribunal) - Final Order No. ST/456 of 2011.
(2) M/s. Support.com India Pvt. Ltd. v. The Commissioner of Service Tax
Commissionerate-II (Bangalore) - ST/20175 to 20184/2017-SM;
ST/20914/2016
3.1 The applicant was extended an opportunity to be heard in person
and the applicant was heard on 28-1-2020. The applicant submitted further sub-
mission, in which he has modified the questions asked in the application. It was
informed to the applicant that the questions raised in the original application are
not covered under Section 97(2). The applicant has asked to modify to include
whether the supply of services by the applicant are liable to GST under Section
97(2)(e). The applicant has submitted that he is supplying services to IRM.; he is
raising tax invoice to Doyen Systems Pvt. Ltd but not to IRM.; He does not have
any contact with IRM nor receiving any payment from IRM. As proof of provid-
ing services to IRM, he provided time sheets that he provides to Doyen Systems.
He stated that he only communicates to IRM for ERP support services for oracle
but not on administrative issues. He requested for a ruling to determine the ap-
plication on the question of GST liability on the service he provides.
3.2 In the submission made during the personal hearing, the applicant
has furnished copies of the Contract between himself and Doyen Systems (Exhib-
it-I); Copy of the Timesheet for 3 months (Oct.-19 to Dec.-19); Copy of the Mail
Correspondence evidencing billing details provided monthly by Doyen Systems
for the three months (Oct. 19 to Dec. 19) and Copy of invoices raised by him on
Doyen Systems for the consulting charges for the three months (Oct. 19 to Dec.
19). The applicant has elaborated the Nature of Contract, Nature of Service, Re-
ceipt of Service and Consideration for the services provided in the context of his
application. The applicant, further quoting various definitions and provisions
relating to supply, consideration, principal, agent, recipient, export of service and
place of supply, has stated that in the present case, the support services are pro-
vided by him to the US based client directly and therefore the liability for pay-
ment of consideration is also on the foreign client being the recipient of the ser-
vices. This is evident from the fact that the timesheet evidencing the hours
worked for the client are approved by them which indicates that the payment
arising on account of such services is cast on the foreign client to be discharged
by them. However, since the contract of the foreign client is with LOCAL
COMPANY, the payment due to him is routed through LOCAL COMPANY.
LOCAL COMPANY on its part provides him the details of the USD amount due
GST LAW TIMES  6th August 2020  109