5th Annual GST Summit and Awards

Saket Patawari - Executive Director, Indirect Tax - Nexdigm, began his segment for the 5th Annual GST Summit and Awards with a presentation titled, The Nitty Gritty of Intermediaries - Services and Goods. Here, Saket first introduced the concept of an intermediary with a brief history by addressing the intermediary services pre and post-GST. The slides highlighted the key details surrounding the intermediary services prior to 1 October 2014, between 1 October 2014 to 30 June 2017, and 1 July onwards and compared the aforementioned dates.

Next, Saket explains the importance of an intermediary by referencing a case of a cross-border supply and which party bears the cost of paying the GST in such a case.

Saket then talks about a few scenarios involving intermediaries. He states that "if all the parties engaging the intermediary are in India, then the recipient's location becomes the place of supply." He further adds that, "only in the case of an international transaction does the intermediary's location become the place of supply, and becomes a non-taxable transaction."

Subsequently, Saket explains the withdrawal circular and discusses the various scope of intermediaries along with some insightful examples. He then discusses the illustrations that make sense of the different kinds of business scenarios provided in the circular.

He presents the various case references that highlight how the intermediary in any transaction is depicted. The cases he discussed were the following:

• Godaddy India Web Services Pvt. Ltd. - a self-marketing case,
• Toshniwal Brothers (SR) Pvt. Ltd. - another marketing case,
• Universal Services India Pvt. Ltd. - a payment processing case,
• Lubrizol Advanced Materials India Pvt. Ltd. - an administrative and sales related services case,
• Chevron Philips Chemicals India Pvt. Ltd. - a sales promotion of chemicals case,
• Verizon India Pvt. Ltd. - a US telecommunication entity having a subsidiary in India.

By the end of explaining these cases, Saket mentions that there is a huge gray area and a great attraction of litigation when it comes to identifying what qualifies as an intermediary and what does not.