Supply of service sub-contracted by recipient company cannot be considered as intermediary

Last updated: 22 January 2022

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The Gujarat AAAR has ruled that services like machine installation and training, sub-contracted by an Indian company (Stovec Industries Ltd.) on behalf of a foreign company (SPG Prints Austria GMBH), are not considered intermediary services. The ruling clarifies that the Indian company is providing a composite supply to the foreign company, not acting as an intermediary between the foreign company and its Indian customers. This decision modifies a previous AAR ruling, establishing the foreign company as the recipient of the services.

Court :
AAAR, Gujarat

Brief :
The AAAR, Gujarat, in the matter of M/S. Stovec Industries Ltd. [Advance Ruling No. GUJ/GAAAR/APPEAL/2021/32 dated November 2, 2021] modified the ruling passed by the AAR, Gujarat and held that, supply of installation/up-gradation of machines and training services for and on behalf of the Company located outside India, by the supplier in India will not fall under the definition of 'intermediary'.

Citation :
Advance Ruling No. GUJ/GAAAR/APPEAL/2021/32 dated November 2, 2021

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