Fact: M/s. Asahi Kasei India Private Limited (“the applicant”) is a Indian subsidiary company of Asahi Kasei Corporation, Japan ("Asahi Japan"). Asahi Japan is the flagship company of the Asahi Kasei group. Asahi Kasei group S fibers and textiles, petrochemicals, pharmaceuticals, polymers, electronic devices, home products, construction materials, health care etc. The applicant provides sales promotion and marketing support to Asahi Kasei group as the services agreement dated March 01, 2013 and Marketing Services Agreement with various group companies of Asahi Kasei group.
Issues Involved: The applicant has sought advance ruling in respect of the following questions: 1. Whether the service supplied by the applicant under the Service Agreement dated March 01, 2013 constitute a supply of "Support services" falling under HSN code 9985 "Intermediary service" classifiable under HSN code 9961/9962? 2. Whether the service supplied by the applicant under the Marketing Services Agreement dated December 1, 2012 constitute a supply of "Support services" falling under HSN code 9985 or "Intermediary service" classifiable under HSN code 9961/ 9962? 3. Whether the services provided by the applicant is an export of services as defined under Section 2(6) of the IGST Act 2017?
Held: The Hon’ble AAR of Maharashtra vide its Advance Ruling No. GST-ARA-35/2018-19/B-108 dated September 05, 2018 stated as follows:
1. (i) The services provided by the applicant in the nature of Research on the matter related to functioning of the holding of company such as - corporate accounting, corporate finance, corporate personnel and labour relations, corporate research and development, quality assurance and corporate intellectual property, and provide Party A with its report of the research thereon would fall under service code tariff 99859 as other support services nowhere elsewhere classified. (ii) The services provided by the applicant in the nature of Information on Market in the territory which includes - Economic, industrial and technical information on the products falling under the category of the Products and their markets, trends and outlook together with similar information concerning such other industries in the Territory, To provide necessary assistance in business activities (including interpreting) to such representatives, To undertake market surveys of the Products in the Territory and report the results thereof to Party and Ancillary services to all above services, including, but not limited to, those services with regard to finance, accounting, and patent and legal matters would fall under service code tariff 99837 with service description market research services.
2. The services supplied by the applicant under the Marketing Services Agreement would fall under Group 99837 as Market Research Services.
3. The applicant satisfies all the ingredients of 'export of services' the service provided by the 'Marketing Services Agreement would qualify as an export of taxable service as per the definition of Section 2(6) of the Integrated Goods and Services Tax Act 2017 " export of services" means the supply of any service when (i) The supplier of service is located in India; (ii) The recipient of service is located outside India; (iii) The place of supply of service is outside India; (iv) The payment for such service has been received by the supplier of service in covetable foreign exchange; And (v) The supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation in Section 8;"
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