ABC Ltd., manufacturer of electronic items is a Singapore based Company. It wants to launch its products in India. ABC Ltd. seeks the advice of XYZ consultants, an Indian Company to know about the requirements and interest of Indian people so as to make changes in its products. For this service XYZ Ltd. charged $10,000. In addition to this it provides following services like:

1. Services relating to developing of customers in India. For this it charged commission $ 10,000

2. XYZ Ltd. organises an event in India for ABC Ltd. For this it charged $ 5000

ABC Ltd. makes payment in convertible foreign exchange.

Determine Place of supply of service provided by XYZ Ltd.? Whether it will be considered as Export of service?


Service of Consultancy

Place of supply is determined as per section 13 of IGST Act in case where the location of supplier or location of recipient is outside India.

The given case does not fall under Section 13(3) to 13(13), therefore the residuary clause 13(2) will apply and the place of supply will be the location of recipient of service i.e. Singapore.

Further, the definition of Export of service is given under section 2 of IGST Act as follows:

(6) '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 convertible 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 1 in section 8;

In the given case, since all the above conditions are fulfilled, therefore it is export of service.

Developing Customers in India

XYZ Ltd. is providing intermediary service relating to developing of customers. Place of supply as per section 13(8) of IGST is the location of supplier of service i.e. India (location of XYZ Ltd.)

Further in this case condition (iii) of Export of service is not satisfied, it is not considered as Export of service.

Organizing an Event

Place of supply as per section 13(5) shall be the place where the event is actually held i.e. India.

As the condition (iii) of Export of service is not satisfied, it is also not considered as Export of service.