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Activity carried out in India in terms of 'Prue - sale and marketing services agreement' qualifies as an "intermediary" and subject to levy of GST.

Levy of GST The present appeal has been filed against the advance Ruling NO. KAR/ADRG 31/2019 Dated: 12th Sept 2019.

The Authority for Advance Ruling vide order No. KAR ADRG 31/2019 dated 12th Sept 2019 held that the activities carried out in India by the applicant in terms of the “Pre-sale and Marketing Services Agreement” qualifies the applicant as an “Intermediary” as defined under Section 2(13) of the IGST Acts 2017 and consequently by Subject to the levy of GST.

The Authority after examining the provisions of law and the terms of the agreement, held that the activities of the applicant cannot be classified as ‘intermediary service” Notwithstanding the above, we find that the ruling given by the Authority at Maharashtra has examined the case of the applicant in the light of the terms of the agreement placed before it. The Authority in that case found favour with the terms of the agreement and held that the applicant in that case was not an ‘intermediary’. Although the Pre-sales and Marketing Agreement in this Appellant’s case does mention that they are independent contractors and are not to act as an agent of Infinera US in any manner, we find that the actual activity performed by the Appellant as outlined in the BAPA is one of facilitating the supply of goods by Infinera US to their customers in India. For the above reasons we are not inclined to give any weightage to the ruling given in the case of M/s. Asahi Kasei India Pvt Ltd.. In view of the foregoing discussions, we uphold the decision of the AAR that the pre-sale and marketing service provided by the Appellant of the products of the overseas client - Infinera US, 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.

We uphold the Advance Ruling No KAR/ADRG 31/2019 dated 12-09-2019 and dismiss the appeal filed by M/s. Infinera India Pvt Ltd on all counts. — Infinera India Pvt. Ltd., In Re… [2020] 20 TAXLOK.COM 054 (AAAR-Karnataka)

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