Construction of Institute outside India when Service Provider and Service Recipient in India

In  M/s. Sri Avantika Contracts (I) Limited, [GST-AAR 05/2021 dated August 05, 2021],  M/s. Sri Avantika Contracts (I) Limited (“the Applicant”) has sought an advance ruling on the issues of applicability of Goods and Services Tax (“GST”) on construction of Police Academy in Maldives under a Memorandum of Undertaking (“MoU”) between the Government of India and Maldives, the contract of which being awarded to National Buildings Constructions Corporation Limited. (“NBCC”), which in turn, sub-contracted to the Applicant by NBCC

The Hon’ble Telangana Authority of Advance Ruling (“TAAR”) stated, since the MoU is between Govt. of India and Maldives and the contract has been awarded to NBCC which is sub contracted to the Applicant, the Applicant does not have any successive relationship with the Govt of Maldives, thus, not providing any services directly to the Govt. of Maldives, instead NBCC, is the recipient of service by the Applicant.

Furthermore, it stated that both the Applicant and the Recipient are based in India, the place of supply is to be determined under proviso of Section 12(3) of the Integrated Goods and Services Tax Act, 2017 (“IGST Act”) i.e.  the location of the recipient, i.e, NBCC would be the place of supply in the above arrangement.

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