The Maharashtra Appellate Authority for Advance Ruling has held that place of supply of service for which the incentive received would be outside India to attract the definition of Export u/s 2(6) of IGST,2017.
The Appellant is a GST registered person in Maharashtra and is a reseller of Intel products which they purchase from various Distributors of Intel Inside US LLC (IIU) have entered into an agreement with IIUL under the Intel Authorized Components Supplier Program (IACSP) about a non-binding Plan of Record Target (POR Target) to which the Applicant will earn certain incentives as a percentage of performance to quarterly goal on eligible Intel products.
The Appellant contended that the incentives received are post procurement of goods and such discounts are directly linked to invoices, hence they cannot be considered as a taxable supply. Further stated that the Incentives are not a consideration for the supply of any product and claimed that this supply would qualify as an export service defined under sec 2(6) of IGST Act.
It was contended that the appellant who was the supplier of service is located in India and the recipient is located outside India, thereby attractable to all conditions of export of service is satisfied in the transaction. It was stated by the appellant that the transaction as an export and claimed the Zero-rated Supplies.
The appellant authority observed that under Section 13 (3) (a) the services supplied in respect of goods are required to be made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services to provide the services, The appellant authority viewed that the marketing services are provided in respect of goods which are made physically available by the recipient of services to the supplier of marketing services to provide the services.
MAAR comprising Shri. Rajiv Magoo, Member Central Tax and Shri. T. R. Ramnani, Member State Tax, has observed that the place of provision of services is the location of the appellant who was the supplier of services, which was in India and held that the impugned supply does not qualify as export of services as per Section 13 (3) (a).
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