14 August 2018
A Person located in India is providing services related to electricity department and related works such as feasibility report preparation, TEV study and government liasoning to clients located outside India. These services are provided by a person not exclusively to just one client but to all other clients and invoice are also made by him in US dollar and money also received in US dollar.
so whether this is export of service or not?? and whether a person can be termed as intermediary for foreign Client or not???
what will be the GST impact on this transaction?
15 August 2018
It is not an intermediary service. Thus, it is an export of service and such supplies are zero rated supply. You can either export the services on bond/LUT or take refund of the GST paid on such services.
15 August 2018
Section 2(13) of the IGST Act defines intermediary- “intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account;
In the present case he work is- "works such as feasibility report preparation, TEV study and government liasoning". Here the service is preparation of report. The report is given to the receiver. The receiver makes the payment. In such transaction, there is no third person. The relationship is on principal to principal basis. Even in liasoning work, the service provider is providing his own service to the client. This intermediary work is absent here also. Intermediary means somebody who facilitates "supply of goods or services or securities" between two or more person. The definition cannot be read in an expansive manner- can we say that a transporter is facilitating supply of goods between two or more person; or an advocate facilitating communication between client and court- hence they are intermediary. Nature of supply made by an intermediary must be same as nature of supply made by the principal. Normally there must be a principal-agent relationship for a services to be classified as intermediary service. Slightly tricky legal point, which can be appreciated through law of agency.
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