Category: IT and ITES

1. An enterprise which participates, either directly or indirectly, through one or more intermediaries, in the management, or control or capital of the other enterprise is an associated enterprise.
2. In the context of GST, associated enterprise is particularly relevant in the case of supply of services, where the supplier is located outside India.
3. In such cases, the time of supply will be the earlier of date of entry in the books of account of the recipient of supply or the date of payment – thus, within ‘associated enterprises’, the levy under GST is attracted once such book entries are made even if no actual payment takes place or no invoice
   is issued.

(FAQ 20: IT/ITES)

1. Generally, the End User Licence Agreement (EULA) is the legal contract between a software application author or publisher and the user of that application governing the usage.
2. The agreement is renewable and/or could be amended from time to time.
3. To find out as to whether there is an element of supply involved when software is delivered to its customer, the terms and conditions of EULA are
   material.
4. The contract for supply therefore assumes significance in this test to decide whether or not there has been ‘temporary transfer or permitting the use or enjoyment of any intellectual property right’.

( FAQ18: IT/ITES)

1.  The recipient, if registered, has to pay the applicable IGST on reverse charge basis.
2. If the recipient is not registered, the matter is treated as an online information and database access or retrieval service (OIDAR) and the OIDAR service provider is liable to take registration and pay tax.

(FAQ 17: IT/ITES)

1. If the laptop bag is supplied along with the laptop in the ordinary course of business, the principal supply is that of the laptop and the bag is an ancillary.
2. Therefore, it is a composite supply and the rate of tax would that as applicable to the laptop.

(FAQ 16: IT/ITES)

No. A person having unit(s) in a Special Economic Zone as
well as outside the SEZ in a State, shall make a separate application for
registration for SEZ unit(s) as a business vertical distinct from his other
units located outside the Special Economic Zone in that State (Refer
Rule 8(1) of CGST Rules, 2017).

( FAQ 15: IT/ITES)

(1) Yes. Under GST, every entity shall take GST registration in each State from which it makes taxable supplies. However, a single registration can be taken for all your SEZ units within a State, whether located in one SEZ or more than one SEZ.
(2) A person having unit(s) in a Special Economic Zone as well as outside the SEZ in a State shall make a separate application for registration for SEZ unit(s) as a business vertical distinct from his other units located outside the Special Economic Zone in that State (Refer Rule 8(1) of CGST Rules, 2017).

(FAQ 14: IT/ITES)

1. You are an intermediary and the place of supply of the service provided by you to the principal is in India irrespective of the mode of payment.
2. Hence, GST is payable on the services provided by you as an intermediary to the principal.

( FAQ 13: IT/ITES)

In terms of section 2 (15) of the IGST Act, 2017, the location of a service provider is to be determined by applying the following steps sequentially:
(1) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business;
(2) where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;
(3) where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provision of the supply; and
(4) in absence of such places, the location of the usual place of residence of the supplier.
The location of ‘C’ is to be determined by applying the criterion from
(2), or (3), or as the case may be, (4).

(FAQ 12: IT/ITES)

1. No. In this case, ‘C’ is covered by the definition of ‘intermediary’ [section 2(13) of the IGST Act, 2017].
2. The place of supply of such intermediary service is location of the supplier in terms of section 13(8) of the IGST Act, 2017.
3. As ‘C’ is located outside India, GST is not payable in this case.

(FAQ 11: IT/ITES)

1.  Yes, you would be liable to pay GST.
2. A supply is treated as an import of service if the following conditions are satisfied:
   (1) the supplier of service is located outside India;
   (2) the recipient of service is located in India; and
   (3) the place of supply of service is in India.
3. The place of such supply would be taken to be the location where the firm is registered (in GST) and the supplies would attract integrated tax (IGST).
4. The factum of which currency was used to pay the consideration is immaterial.

( FAQ 10: IT/ITES)