Query regarding Export of service

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Jeetu Kodwani

Consultant

423 Points Joined October 2011

dear experts.

kindly give your opinion on the following ex.

Mr.A (residing in india) running digital marketing business.

ABC Inc (Singapore Based Co) wants to advertise their products/services on social media in other countries like USA.

Mr.B (residents of USA) holds the time space on social media websites to advertise any product/services.

now ABC Inc has given the contract to Mr.A advertise their products on digital marketing websites in USA.
and Mr.A has subcontracted that contract to Mr.B.

ABC Inc will pay (in USD) the advertising charges to Mr.A based on number of person viewed the add.
Out of the amount Received from ABC Inc.
Mr.A will pay (in USD) some charges to Mr.B. for running the add.

can you please explain the GST liability to Mr.A.??

what is the place of supply of services provided by Mr A to ABC Inc.?

can we treat him as a export of services and put in zero rated supply.?

Replies (3)

Pankaj Rawat

GST Practitioner

55062 Points Joined June 2017

Where the ABC Inc situated.?? (As in your example it is Singapore based company, if it is situated in india)

Pankaj Rawat

GST Practitioner

55062 Points Joined June 2017

Reply : as iam assuming that ABC Inc is situated in Singapore.

First of all we need to check the defination of export of services u/s 2(6) :

Supplier located in India

Recipient located outside India

POS is outside India.

Payment reced in convertible foreign exchange.

So as per your Example , Supplier Mr A is located in India, Recipient ABC Inc located outside India, Place supply is outside India & Money reced in foreign exchange. Hence it satisfy the condition export .

MR. A will raise export invoice to ABC Inc. & There will Import of services from Mr. B To Mr.A.

So summarised:

Mr. A bill to ABC in lc (Export of Services )

MR B will bill to Mr. A (Import of services)

Jeetu Kodwani

Consultant

423 Points Joined October 2011

Thanks for your reply sir,
yes, here ABC Inc is situated in Singapore.

so as per the above solutions Mr.A is liable to pay GST on RCM Basis on invoices received from Mr.B.
but Mr.B is located in USA and he is providing the services to ABC Inc in Singapore, still Mr.A is liable to pay??

sir, i have also thought the same but the activity of Mr.A looks like intermidiary and if i consider A as an intermediary then place of supply will b location of A and GST liability will come even thought consideration in USD.

sir, can you please explain more between intermidiary and export of service.