Page 112 - GSTL_6th August 2020_Vol 39_Part 1

38 GST LAW TIMES [ Vol. 39
services as the clients themselves are the recipients of his services and the con-
sideration is paid over to him only on the approval of the said clients and that
though the payment is received in rupee equivalent, the actual contracted rate is
in US Dollars, based on which the billing is also made.
Section 2(93) defines ‘recipient’ as :
(93) “recipient” of supply of goods or services or both, means. -
(a) where a consideration is payable for the supply of goods or
services or both, the person who is liable to pay that consider-
ation;
(b) where no consideration is payable for the supply of goods, the
person to whom the goods are delivered or made available, or
to whom possession or use of the goods is given or made
available; and
(c) where no consideration is payable for the supply of a service,
the person to whom the service is rendered,
and any reference to a person to whom a supply is made shall be construed
as a reference to the recipient of the supply and shall include an agent act-
ing as such on behalf of the recipient in relation to the goods or services or
both supplied.
In terms of Section 2(5) of the CGST/TNGST Acts,
(5) “agent” means a person, including a factor, broker, commission agent,
arhatia, del credere agent, an auctioneer or any other mercantile agent, by
whatever name called, who carries on the business of supply or receipt of
goods or services or both on behalf of another;.
In the instant case, as already brought out, there are two sets of contracts, one
between Doyen Systems and its clients providing for software support services
to be rendered by them and the other between Doyen Systems and the applicant
providing for professional and consultancy services to be rendered by the appli-
cant. The applicant is not a party to the first contract nor is he privy to it. Doyen
systems have engaged his services as a consultant. In the instant case there is a
consideration, for the services rendered by the applicant to Doyen which the ap-
plicant states is quantified based on the number of hours specified in the time
sheet , that he works with the employees of IRM, USA, which is the client of
Doyen. In fact, even the time-sheet is not forwarded by the applicant directly to
the foreign clients for their approval but only to the company which then verifies
the claims with the clients for genuineness and then makes the payment for the
services rendered by the applicant. The foreign clients pay the consideration to
Doyen Systems as per the independently agreed upon contract value which has
no relevance or reference to the contract that the applicant has with the company.
As far as the clients are concerned, the services are provided by Doyen Systems
only. In terms of the contract entered into with the applicant, Doyen Systems is
liable to pay the consideration; the foreign client is not obliged to make any
payment as consideration to the applicant. In case of any payment default, the
applicant can lay a claim only against the company and not against the foreign
client. Thus the applicant provides services as a ‘Consultant’ engaged by Doyen
Systems and hence the receiver of service in this case is Doyen Systems as per
definition in Section 2(93)(a).
Further, the applicants contention that he is an ‘agent’ of Doyen and in
that capacity’ providing services to clients of Doyen is not substantiated by any
documentary proof that the applicant is the representative of Doyen while deal-
ing with their clients.
GST LAW TIMES  6th August 2020  112