Classification of service— The issues on which the Appellant have disputed with regard to the ruling enunciated by the MAAR are being enumerated herein under:

(i) Whereas the MAAR has held that the Appellant will be liable to pay IGST under the Reverse Charge Mechanism in terms of Section 5(3) of the IGST Act, 2017, attributable to the place of supply falling in the taxable territory as per Section 13 (12) of the IGST Act, 2017, the Appellant are of the view that since the e-goods under question are not downloaded by them and the said e-goods are stored at the Cloud Services located abroad, thereby making the subject e-goods procurement transaction an out and out transaction, it can be said that the said e-goods are not received by them in India, and hence, No IGST liability will arise on the said e-goods purchase transaction done by the Appellant with their foreign suppliers;

(ii) Whereas the MAAR has held that supply of e-goods by the Appellant to the Indian buyers from whom the payments are received in Indian Rupees will attract GST attributing to the place of supply of OIDAR services in this case being in the taxable territory, the Appellant are of the view that since the subject e-goods are retrieved by their customers using the keys provided by them directly from the cloud servers located outside India, the said transaction will qualify as an out and out transaction;

(iii) Whereas the MAAR has held that it is not possible to ascertain the place of supply of the OIDAR services under consideration as the Appellant have not provided the details of their customers regarding the seven non-contradictory conditions enumerated in the explanation to the Section 13 (12) of the IGST Act, 2017. the Appellant are of the view that since their customers are located abroad and the payments are received in the foreign exchange, these transactions should be considered as export of services, and accordingly, no liability of IGST or CGST and SGST should arise in this case;

In respect of first issue, the appellant has made the payments to the foreign suppliers i.e consideration is paid which enables him to supply them to his customers or provide access to them- the fact that he gets the right to supply it to his customers shows that there is supply by the foreign supplier to the Appellant and the Appellant gets the right to supply it further. The transaction of purchase of e-goods from the foreign suppliers will attract the levy of IGST under the Reverse Charge Mechanism in terms of the provisions of Section 5(3) of the IGST Act, 2017 read with the Notification No.10/2017-I.T. (Rate) dated 28.06.2017. Accordingly, the Appellant will be liable to pay IGST under reverse charge basis on the purchase of the e-goods from their foreign suppliers even though the said e-goods, after being purchased by the Appellant, are stored on the Cloud Servers located outside India.

In respect of second issue,the appellant has argued that the same (whether consideration is received in dollars or rupees) is an out and out transaction and no GST is payable. It is already held in the preceding paragraph as to how there is import of the services by the Appellant from the foreign supplier and even though the goods are not downloaded, there is a supply of goods from the foreign supplier to the Appellant. In that view of the matter, there is no case of an out and out sale- there is import of digital goods by the Appellant by which he gets the right to transfer it to his customers and as his customers are located in India, it will attract GST. As to whether it attracts SGST-CGST or IGST will depend upon the location of the customers in India- whether in or out of Maharashtra. As regards this issue under discussion, we approbate the ruling pronounced by the MAAR and reject the contention, put forth by the Appellant in as much as the supply of the subject e-goods to the Indian customers are being made through the Cloud Servers located abroad.

In respect of third issue, the said question, as to whether the supply of subject OIDAR services by the Appellant to their foreign customers can be considered as export of services, cannot be answered in view of the aforesaid findings and shall be decided by the jurisdictional officer on the basis of facts of the transaction under evaluation.

Held that— This authority does not find any reason to interfere with the Advance Ruling order. Therefore, the Appeal filed by the Appellant is, hereby, dismissed.