The Gujarat Authority of Advance Ruling (AAR) ruled that CGST and SGST for the services provided as an “intermediary” as both supplier of service and place of supply of service is in Gujarat.
The applicant, M/s. Sagar Powertex Pvt. Ltd. is engaged in the agency business of weaving machineries wherein it is acting as an agent of foreign entities who are supplying such machineries directly to the end customer and the company is getting commission for being an intermediary, thereby creating Principal- Agent relationship.
The applicant has entered into agency agreement with the parties situated outside India wherein it is getting a certain amount as commission in the capacity of Agent/ intermediary from the foreign entities for the Supply of their machinery.
This agreement, made by and between UKIL Machinery Co. Ltd., a corporation organized under the laws of Republic of Korea, located and doing business in the city of Pusan, and “Sagar Agencies Pvt. Ltd.” having its principal office in Ahmedabad, India.
The applicant sought the Advance Ruling on the issue that in the said transaction, whether IGST is applicable or CGST and SGST is applicable.
The Coram consisting of Sanjay Saxena and Mohit Aggarwal observed that since the location of the applicant, who is supplier of services, is in Gujarat and both the supplier of service as well as the place of supply of service is in Gujarat, the supply of services would be considered akin to intra-state supply of services and would be liable to CGST and SGST as per the provisions of Section 9(1) of the CGST Act, 2017.
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