The Government of Maharashtra on November 06, 2023, issued a circular regarding the clarification relating to export of services–sub-clause(iv) of Section 2 (6) of the IGST Act 2017.
The following has been stated: -
•Various representations have been received requesting clarification regarding the admissibility of export remittances received in the Special INR Vostro account, as permitted by RBI, for the purpose of consideration of supply of services to qualify as export of services as per the provisions of clause (6) of section 2 of the Integrated Goods & Services Tax Act, 2017.
•The issue has been examined and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in the exercise of its powers conferred by section 168 (1) of the Central Goods & Services Tax Act, 2017 (hereinafter referred to as the ‘CGST Act”), hereby clarifies the issue as under –
Relevant legal provisions:
Export of services has been defined under clause (6) of section 2 of the IGST Act. As per the said definition, any supply of services needs to fulfill five conditions for it to qualify as an export of services. Clause (6) of section 2 of the IGST Act is reproduced below for reference: “(6) “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 inconvertible foreign exchange 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.
•One of the conditions mentioned in sub-clause(iv) of Section 2(6) of the IGST Act is that the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India.
•For the uniformity. it has been decided that the said circular issued by the CBIC is being made applicable, mutatis mutandis, in the implementation of the MGST Act, 2017. A copy of the referred CBIC circular is attached herewith.
•Trade Circular is clarificatory in nature. Difficulty if any, in the implementation of this Circular, may be brought to the notice of the office of the Commissioner of State Tax, Maharashtra.
The detailed circular is attached in the document given below.
[Trade Circular No. 23T of 2023]
