Facts: Take Off Academy is contracted organization providing facilities / services for electronic delivery of test in India to M/s. Pearson VUE. The term facilities / service include infrastructure, certified test administrators, verification of the candidates, test vigilance and successful delivery of each tests. The key activities undertaken by the applicant have also been narrated in the application. The applicant conducts test for the students or migrants who need to clear the exam before they apply for admission or visa for an overseas university as per Pearson VUE Authorized Centre Agreement. This exam is similar to IELTS or TOEFL but it is computer based exam. M/s. Pearson VUE decides the test fees in consonance with clause 6 of the agreement and the applicant is not entitled to collect the fees from the candidates who are giving exams.
Issue Involved: The consideration received from M/s. Pearson VUE for Tax Invoice No. 1 dated 31.07.2017 for conducting test on behalf of M/s. Pearson VUE in India as export of services u/s 16(1)(a) of the IGST Act or not ?
Held: The Hon’ble AAR of Gujarat vide Advance Ruling/SGST&CGST/2018/AR/31 dated August 30, 2018 ruled that no other issue can be decided by the Advance Ruling Authority and therefore the Acts limit the Advance Ruling Authority to decide the issues earmarked for it under Section 97(2). As the issue raised whether the consideration received by from M/s. Pearson VUE is export of service under the provisions of the IGST Act, 2017, which can only be determined in light of various provisions of the IGST Act, 2017, including Section 2(6), which defines export of services. Thus, one of the important requirements of supply of any service to be treated as export of service is that the place of supply of service is outside India.
Further the applicant has referred to the provisions of Section 13 of the IGST Act, 2017 and submitted that place of supply is outside India as the applicant’s case is not covered by sub-clause 3 to 13 of Section 13 of the IGST Act, 2017. Thus, the applicant is well aware that the issue is related to place of supply. The authority has been constituted in exercise of the powers conferred by section 96 of the Gujarat Goods and Services Tax Act, 2017, which Act extends to the whole of the state of Gujarat. This authority is a creature of statute and has to function within the legal boundary mandated by the Act. As the place of supply is not covered by Section 97(2) of the Acts, this authority is helpless to answer the question raised in the application, as it is lacking jurisdiction to decide the issues. The jurisdiction of this authority does not extend to the questions on determination of place of supply. However, the application is therefore rejected without going into the merits of the case, on the issue of lack of jurisdiction, at the stage of admission.
Note: Similar Advance Ruling authorities such as West Bengal, Kerala had ruled the matter in same line.
Citation: [TS-526-AAR-2018-NT]