Shanti Prime Publication Pvt. Ltd.
Place of Supply — In the instant case, appellant is a company engaged in the business of providing marketing, sales promotion and post sale support services to their clients located outside India. The said services are provided to the foreign client in terms of an agreement and the services are provided to the foreign client in relation to products like scientific instruments used in research and development/quality control primarily in fields of Nano Science, Material Sciences Bio Pharma and Polymer Sciences.
The Authority for Advance Ruling in their Order dated 19th Sept 2018, held that the ‘promotion and marketing services’ provided is in the nature of facilitating the supply of goods and hence would amount to ‘intermediary service’, Further, the AAR held that the ‘after-sale support service’ is independent from the promotion and marketing service and is not a composite supply.
Aggrieved by the above ruling of the AAR, the Appellant is before us in appeal.
The argument of the Appellant that the promotion and marketing services are supplied to the Principal on their own account and hence they fall within the exclusion clause of the definition of intermediary is not a correct interpretation of the law. The language of the exclusion clause is such that it is applicable to those persons who supply such goods or service (or both) on their own account. If a person either ‘facilitates’ or alternately ‘arranges’ any supply of goods or service (or both), between two or more persons. and does not supply such goods or service (or both) on his own account, he would be regarded as an ‘intermediary’. At the risk of being repetitive, the Appellant is clearly facilitating the supply of the products of the overseas client directly to the client’s customers in the territory of India and is not supplying such goods on his own account. Therefore, the Appellant does not fill within the ambit of the exclusion.
Held that—we uphold the decision of the AAR that the service of promotion and marketing of the products of the overseas client is in the nature of facilitating the supply of the products of the overseas client and is appropriately classified as an ‘intermediary service’ as defined under Section 2(13) of the IGST Act. Having concluded that the service supplied by the Appellant is classified as an ‘intermediary service’ as defined under Section 2(13) of the IGST Act, it automatically flows that the place of supply of such service will be in terms of Section 13(8) of the IGST Act.Toshniwal Brothers (Sr) Private Limited, In Re…  8 TAXLOK.COM 043 (AAAR-Karnataka)