GST Refund in case of Export of Services

Hello Everyone,

Hope you all are well.

I have one query regarding GST refund in case of export of services.

One of our clients (incorporated as LLP) is providing outsourcing IT services, It is in a legal agreement with US Inc. company where total capital contributed by Inc. company is 99.99 % out of 100. Indian company raises bills to US Inc. company on monthly basis. There is no Indian business/services, only export of services to the USA.

Now, they filed a GST refund application to GST Portal claiming GST on payment to Indian Vendors but the GST department denied a refund on grounds of non-applicablity of the clause - distinct persons.

Please suggest to us how to move further.

Thanks,

Virag

Replies (2)
Quick Summary
This discussion addresses a query about claiming GST refunds on payments to Indian vendors for exported IT services. The GST department denied the refund, citing the 'distinct persons' clause, as the client's US parent company holds 99.99% capital. The advice suggests proving the Indian LLP is a separate entity, not a branch, and highlights the importance of case laws. If an order has been issued, filing an appeal is recommended; otherwise, a detailed reply to the notice is advised.

You will have to prove that both the entities one in India and one in US are separate and that Indian entity is not  a branch.

There are a number of favourable case laws. If rejection order already made then file an appeal. Or if it is on the notice stage give your reply accordingly.

Before filing the claim it must be ensure that both are distinct entity.

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