The Orissa Authority of Advance Ruling (AAR) ruled that GST under Reverse Charge Mechanism is not payable on receipt of services if it is not imported.
The applicant Tokyo Electric Power Company sought for a ruling as to whether the Applicant is required to be registered under Odisha Goods and Services Act, 2017 and Central Goods and Services Act, 2017 for the consultancy services provided to Odisha Power Transmission Corporation Limited (OPTCL).
The applicant submitted that it is neither liable to obtain registration as a regular taxpayer nor as a non-resident taxable person for the consultancy services provided to M/s OPTCL .
It tried to establish that the supply is made by the Foreign Company, which is located in Japan, is not the supplier in the context of rendering consultancy service.
The coram consists of G.K. Pati and H.K.Mishra observed that Supply of consulting services through substation Engineer/ expert of the applicant to OPTCL is not, therefore import of service within the meaning of section 2 (11) of the IGST Act.
The AAR clarified that the Engineer/expert belonging to the applicant should be treated as a supplier located in India, and made liable to pay GST, the place of supply being determined in terms of section 12 (2) (a) of the IGST Act.
Since, applicant is liable for payment of GST, the AAR held that he is required to be registered under Odisha Goods and Services Act, 2017 and Central Goods and Services Act, 2017 for the consultancy services provided to Odisha Power Transmission Corporation Limited.
The AAR ruled that Supply of service to OPTCL is not an import of service in terms of section 2 (11) of the IGST Act. The recipient is not, therefore, liable to pay GST on a reverse charge basis in terms of Notification No. 10/2017 Integrated Tax (Rate) dated June 28, 2017.
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