Question38: Quarry 1.ABC pvt.ltd, a company engaged in providing trade mark registration ,IPR and related services to overseas clients. ABC pvt ltd has two types of clients as follows: a. Overseas clients for whom they provide services for trade mark registration ,IPR and related services in INDIA , b.Overseas clients for whom they provide services for trade mark registration ,IPR and related services outside INDIA by hiring local service provider. for example for US clients they got registered his trade mark in china by hiring china`s firm. China firm raised invoice to ABC pvt. ltd and in turn ABC pvt ltd raised invoice to US client by adding their margin. No activity or services are performed in India except placing order to Chinese firm and passing the same to US client, just like third world country trade in case of goods. Whether above services are taxable under GST in India, pl provide your opinion with reason.

Quarry 2. Intermediary services : whether commission received in India on third world country trade is taxable under gst? For example commission received on procuring order for goods from US firm on behalf of Chinese firm and commission received from Chinese firm. whether treatment will be same if procuring order for services in place of goods ? You are requested to reply at earliest.

Answer 1. Service relating to IPR

The Place of supply in this case will be decided according to Section 13. Section 13(2) is applicable when the service is not covered under sub-section 3 to 13. The service relating to IPR are not covered under sub-section 3 to 13. Accordingly as per section 13(2) the Place of Supply is the location of the receiver.

Whether it is Export of service or not will depend if the conditions given in section 2(6) are fulfilled. The same is reproduced below:
'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;
If all the conditions given above are fulfilled then it is Export.

2. Intermediary Service
For the Intermediary service when one of the supplier or receiver is located outside India, it is governed by section 13(8)(b). As per aforesaid section the Place of Supply will be India if the person providing Intermediary service is located in India. (reply dt. 26/05/2018)