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MCQ Self Challenge #0083 on Export of Services under GST

Export of Services under GST

 

Dear Professional Seniors & Friends,
Warm Greeting!

Here is the Next post of #MCQ on concept based practical professional knowledge on Export of Services under GST in a unique manner to be self answered by participants. The detailed answer of these MCQs shall be posted next day for the self assessment of the participants.

MCQ 83.1: Mr X was Facilitating Recruitment of Students to a foreign university and Mr X was paid commission in foreign currency based on the performance in recruiting students, i.e a percentage of total fees collected by University from the students. Which of the following statement is true?

A. GST is not levaible since it is export of Services and thus zero rated supply.
B. GST is leviable on Services provided by Mr X.
C. It is deemed Export.
D. None of the Above.

MCQ 83.2: What If in the above Question Mr. X was collecting charges from Students abroad in Indian currency directly instead getting a commission from Universities for recruiting them to Indian universities?

A. GST is not leviable since it is export of Services and thus zero rated supply.
B. GST is leviable on Services provided by Mr X.
C. It is deemed Export.
D. None of the Above.

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CA Sanjay Kumar Agrawal
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Answer MCQ Self Challenge #0083

 

Dear Professional Seniors & Friends,

Warm Greetings!

 

This post of MCQ is on provisions relating to Export of Goods/ Services under GST

 

Answer MCQ 83.1: B) GST is leviable on Services provided by Mr X.

 

Answer MCQ 83.2: B) GST is leviable on Services provided by Mr X.

 

Practical Analysis for MCQ 83.1

 

  • As per Section 2(6) of the IGST Act, Export of Service means supply of Service where –
  • Supplier is located in India – Mr X
  • The Recipient is outside India – Universities
  • Place of Supply outside India – Have to determined
  • Payment in Convertible foreign Exchange – Yes
  • Both should not be establishments of Distinct person – Yes

 

  • Here the main determinant of the liability to pay GST is Place of Supply.
  • On detailed Examination it is analysed that the main Service of the Applicant is facilitating Recruitment of Students and Consideration is paid as Commission on the basis of Course fee and Recruitment through the applicant.
  • Mr’X Acts on Behalf of the Unversity and is not allowed to receive any fees or charges from the students or deduct anything from the fees payable by the Students to the University
  • Mr X therefore , represents the University in the territory of India and Acts as its recruitment agent. It is therefore clear that whatever services that the applicant provides is as a representative of the University and not a an Individual Service Provider .
  • Section 2(13) of the IGST Act, 2017, “Intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account.
  • As per above analysis, in our question, Mr X shall be intermediary of foreign universities.
  • Being an Intermediary Service Provider, the place of Supply shall be determined under Section 13(8)(b) of the IGST Act . The place of Supply shall be location of supplier i.e. in India . As the place of Supply is not outside India , The Applicants services to the Foreign Universities does not qualify as “ Export of services “ and is therefore Taxable under GST Act.

 

Based on the above analysis, Correct answer to MCQ 83.1 B) GST is        leviable on Services provided by Mr X

 

Practical Analysis for MCQ 83.2:

 

In this question, Mr. X is charging money directly from students so will not be an intermediary of foreign universities. Hence place of supply shall be the place of students which is outside India.

 

But in this case money is received in Indian currency so other condition for treating it as exports do not qualify.

 

Based on the above analysis, Correct answer to MCQ 83.2.: B)GST Is leviable on Services provided by Mr X.

 

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different. Please do not treat this as professional opinion; you can definitely have your own opinion.)

 

Sincere Regards!

CA Sanjay Kumar Agrawal

Mobile: 9810116321

 

To access MCQ posts regularly, please Join Telegram Channel:
https://t.me/caSanjayKumarAgrawal

 

For All MCQ post please click on:

Webpage: http://www.casanjay.me/

Facebook: https://www.facebook.com/CA.Sanjay.K.Agrawal/

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