QUESTION

Mr. A residing in India, have contacts in Canada with fleet owners (Transporters) and some business house.
Mr. A give business to Transporters in Canada by using his contact with business houses and charge commission from the Transporters.
1. What are the GST Implications?
2. What is HSN/SAC Code?
3. Is it export of service?

ANSWER

FACTS OF THE CASE :
Mr. A in India is providing intermediary service by providing Canada based clients to Canada based Transporters and he earns commission from transporters for this service.

LAW APPLICABLE :
1. Sub-section (8) of section 13 IGST dictates that ;
"The place of supply of the following services shall be the location of the supplier of services, namely;

(a) services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders;

(b) intermediary services;

(c) services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month."

2. Section 2(6) of IGST defines Export of Services as follows;
" '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; 1[or in Indian rupees wherever permitted by the Reserve Bank of India] 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 "

INTERPRETATION :
Mr.A is providing Intermediary services from India to Canada. The place of Supply is decided as per section 13 subsection (8). Under clause (b) of the said sub section POS is "location of supplier of service" i.e India.

CONCLUSION :
So to answer your question,
Question 1. What are the GST Implications?
GST will be applicable since POS is within India. Since POS is same as the location of supplier of service therefore CGST+SGST will be applicable.

Question 2. What is HSN/SAC Code?
HSN : 9985

Question 3. Is it export of service?
Clause (iii) of Section 2(6) of IGST requires that POS must be outside India for a supply to be considered as export of service. Since in this case POS is within India therefore this is not an export of service. (Reply dt. 09/08/2021)