Clarification relating to export of services - condition (v) of the section 2(6) of the IGST Act, 2017

Circular No. 161/17/2021 - GST Dated 20th September, 2021

Are you confused with the condition (v) of the section 2(6) of the IGST Act, 2017 relating to Export of Services?

Do you know when the establishments are 'mere establishment of a distinct person'?

Do you know whether this supply of service can be treated as Export of services or not? ?

In this article you will get answer of all this questions.

To answer this we need to refer following Definitions and explanations?

IGST Act, 2017

Section 2(6) - Export of service

Means the supply of any service when, -

• Supplier is Located in India
• Recipient is Located outside India
• Place of Supply is Outside India
• Payment received by the supplier in convertible foreign exchange

• Supplier and recipient are not merely establishments of a distinct person in accordance with explanation 1 in section 8

Section 8

Explanation 1 - Condition wherein establishments of a person would be treated as establishments of distinct person

Where a person has,

1. 1 establishment in India and other establishment Outside India
2. 1 establishment in a State/ UT and other establishment in other State/ UT
3. 1 establishment in a State/UT and other establishment in the same State/ UT, being a business vertical.

Explanation 2 -

A person carrying on a business through

a branch or

an agency or

a representational office

in any territory

shall be treated as having an establishment in that territory.

Section 2(24) - Definition of a PERSON as per section 2(84) of the CGST Act, 2017.

a person Includes: -

• an Individual
• a Hindu Undivided Family
• a COMPANY
• a Firm
• a Limited Liability Partnership
• an Association of Persons or Body of Individuals, whether incorporated or not, in India or outside India
• any Corporation established by or under any Central Act, State Act, or Provincial Act or a Government company as defined in clause (45) of section 2 of the Companies Act, 2013.
• any Body Corporate incorporated by or under the Laws of country outside India
• a Co-operative Society registered under any law relating to co-operative societies;
• a Local Authority
• Central Government or a State Government;
• Society as defined under the Societies Registration Act, 1860;
• Trust; and
• every Artificial Judicial Person, not falling within any of the above;

B. Companies Act, 2013

Section 2(20) - Company

means a company incorporated under this Act or under any previous company law;

Section 2(42) - Foreign Company

means any company or body corporate incorporated outside India which -?

a. has a place of business in India whether by itself or through an agent, physically or through electronic mode; and?

b. conducts any business activity in India in any other manner.