When the services are provided on a principal to principal basis, then the activity will not qualify under the definition of intermediary.
Classification of service— In the instant case, appellant has submitted that they are engaged in manufacturing Rotary screen printing machine, installation and servicing of the machines, and also offers products for conventional and digital engraving methods. They have entered into a contract with SPG Prints Austria GMBH to provide particular services to customers of SPA in India, as per SPA’s instruction. Such services shall include installation / up-gradation of machines sold by SPA, training at SPA’s customers’ site etc.
The Applicant has submitted that they had sought advance ruling with respect to activities covered under service section of the contract.
The appellant submitted that in their present case, SPA has sub-contracted the services like installation/ upgradation of machines sold by SPA, training at customer’s site etc. to the appellant. Such services would be provided by the appellant to SPA as part of sub-contract agreement, by providing services to customers of SPA. Accordingly present scenario would be construed to be arrangement on principal to principal basis and same would not fall within the purview of ‘intermediary services’.
Held that— This authority agree with the appellant that the specified transactions are not “intermediary” in nature and they fall under exclusion part of the definition of ‘intermediary’ as provided under Section 2(13) of the IGST Act, 2017.
When the services are provided on a principal to principal basis, then the activity will not qualify under the definition of intermediary.
Classification of service— In the instant case, appellant has submitted that they are engaged in manufacturing Rotary screen printing machine, installation and servicing of the machines, and also offers products for conventional and digital engraving methods. They have entered into a contract with SPG Prints Austria GMBH to provide particular services to customers of SPA in India, as per SPA’s instruction. Such services shall include installation / up-gradation of machines sold by SPA, training at SPA’s customers’ site etc.
The Applicant has submitted that they had sought advance ruling with respect to activities covered under service section of the contract.
The appellant submitted that in their present case, SPA has sub-contracted the services like installation/ upgradation of machines sold by SPA, training at customer’s site etc. to the appellant. Such services would be provided by the appellant to SPA as part of sub-contract agreement, by providing services to customers of SPA. Accordingly present scenario would be construed to be arrangement on principal to principal basis and same would not fall within the purview of ‘intermediary services’.
Held that— This authority agree with the appellant that the specified transactions are not “intermediary” in nature and they fall under exclusion part of the definition of ‘intermediary’ as provided under Section 2(13) of the IGST Act, 2017.