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Place of supply of Export of service

Akhil (Student) (63 Points)

22 February 2023

A foreign Company XYZ has appointed an Indian Company ABC Ltd. for carrying out market research in India as XYZ is planning to launch its product in India. What would be the 'place of supply' in such a case?

Would your answer be different if ABC Ltd. was asked to carry out the same research in five countries including India?

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18 Replies

CA Altamush Zafar (GST Consultant) (15907 Points)
Replied 22 February 2023

Seems to be export of services if all other conditions are also complied

Jobin John Mathew (2 Points)
Replied 23 February 2023

In both the Cases - POS shall be outside India. It's Export of Service.

CA. Bhavik P. Chudasama (Practice) (3672 Points)
Replied 23 February 2023

Since POS as per Section 12(2) of IGST Act, would be Location of Service Recipient and Other Conidition of Export of Service should be complied to claim it is as Export of Service

Akhil (Student) (63 Points)
Replied 24 February 2023

Both are examples of ICAI module. In first case it is treated as exempt supply as it is export of service.

In the second case it is treated as taxable stating when place of supply is in taxable & nontaxable territory ,it will be assumed to be in taxable territory. Hence taxable.

Akhil (Student) (63 Points)
Replied 24 February 2023

Both are examples of ICAI module. In first case it is treated as exempt supply as it is export of service.

In the second case it is treated as taxable stating when place of supply is in taxable & nontaxable territory ,it will be assumed to be in taxable territory. Hence taxable.

CA. Bhavik P. Chudasama (Practice) (3672 Points)
Replied 25 February 2023

Mr Akhil,

Hope you understand that this is a Public Platform where a Genuine Querist or questions are asked , where Person is stuck in a Transaction under any Act.

This is not a Platform where you can ask a question from any book and you test the Members knowledge on any platform majorly where experts and members are Qualified Professionals and taking out time from their daily routine to reply to such queries and help other members on Honorarium basis. So such type of behaviour is not acceptable its truly a waste of time of members replying to the questions and helping other members.

CA Altamush Zafar (GST Consultant) (15907 Points)
Replied 25 February 2023

He will understand later that how different practical scenarios are from book examples.

But if the book is saying that the supplies are exempt because it is export it is totally incorrect.

Huge difference between exempt and zero rated supplies.

CA. Bhavik P. Chudasama (Practice) (3672 Points)
Replied 25 February 2023

I even reffered to the Module by ICAI on GST , he is referring to Question 15, even there it is mentioned that is Export , so you can judge that even in replicating the question he has made mistake.

If a Person does not know about the Definition of Exempt Supply and Zero-rate supply , do you even think he capable of answering what is Export of Service ?

Akhil (Student) (63 Points)
Replied 27 February 2023

I am student of CA final. I got confused between these two similar looking examples from the module. It was not my intention to test anyone. Can anyone please explain how are these two services different one, is ques 15 & the other is ex 75 on page 5.63.

Because in module ques 15 it is exempt supply because its place of supply is outside India.

CA Altamush Zafar (GST Consultant) (15907 Points)
Replied 27 February 2023

In module question 15 no where it is written that it is exempt supplies. It is only written that POS is outside India and will be treated as export of service.

However the example you are stating is poorly drafted wherein they didn't explain properly that what performance needs to be done. By the language of the example, it seems its ambiguous whether there is performance-based service or not.

The question is however clear that neither performance is being made on the product since no sample is received nor performance is being done on any person (as to giving him service) therefore it is export.

Don't get confused by the example, the language is ambiguous and they are assuming that it is performance based.

CA. Bhavik P. Chudasama (Practice) (3672 Points)
Replied 28 February 2023

So even in case you were confused you should have clearly mentioned that this is from ICAI Module and you want a explanation or clairfication since you are confused.

better be carefull while drafting any such queries further

Akhil (Student) (63 Points)
Replied 28 February 2023

Mr. Altamush

Sir, I get your point but why isnt the same logic used in the example on page 5.73 where supplier is providing the same service but in different locations one of them being in India.

Souldn't its place of supply be also Outside India- as to location of recipient?

Akhil (Student) (63 Points)
Replied 28 February 2023

Mr. Bhavik

i told you it was not my intention. What would i get by testing a random person on internet. Never expected a Qualified Professional to be so insecure about his knowledge as to start making personal comments about one's capability.

CA Altamush Zafar (GST Consultant) (15907 Points)
Replied 28 February 2023

@ Akhil

the module has given the example under performance based supplies. Therefore they have assumed that certain performance would have been done on goods or person. You will have to take the same assumption in exams ...the question is how will you know that such assumption needs to be taken is to see the structure of the question. Where the question is silent as to any performance have been done on any goods or individual, but they have given that multiple places have including taxable territory you need to give importance to this fact and will have to see whether services falls under sub-section 3, 4, 5 of section 13.

In the question however it was very clear that the foreign party has not provided any goods to the service provider and the service included only survey question and not any performance on any goods or individual therefore no assumption was required in that case and the question was very crystal clear.

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