Savio Jewellery V/s Commissioner, Central Goods and Service Tax {HIGH COURT OF RAJASTHAN} :
Date of Order : 02-05-2024
simplified explanation of the ruling by the Rajasthan High Court regarding the taxation of services received by Savio Jewellery from an exhibition held outside India:
Background:
- Assessee: Savio Jewellery, a business dealing with jewellery.
- Issue: The assessee participated in a jewellery exhibition held outside India and received services related to the exhibition.
- Taxation: The show cause notice was issued to the assessee for non-payment of GST on the services received during the exhibition.
Key Points of the Case:
- Place of Supply: According to Section 13 of the IGST Act, 2017, the place of supply of services is determined based on certain criteria, including the location of the supplier and the recipient of services.
- Reverse Charge Mechanism (RCM): The government, under Section 5(3) of the IGST Act, can specify categories of services where tax is payable by the recipient (assessee) on a reverse charge basis. Notification No. 10/2017-Integrated Tax(Rate), dated 28th June 2017, specifies such categories.
- Decision of the Court:
- The High Court upheld the imposition of GST on the exhibition services received by the assessee in a non-taxable territory (outside India) from a person located outside India.
- The services were taxable under reverse charge mechanism because the recipient of the services (Savio Jewellery) was registered in the taxable territory (India).
- The location of the supplier (outside India) and the registration status of the recipient (in India) were crucial factors in determining the tax liability under GST.
- Legal Basis: The ruling cited Section 13 and Section 5 of the IGST Act, 2017, along with Notification No. 10/2017-Integrated Tax(Rate), as the legal framework for determining the place of supply and applicability of reverse charge mechanism.
Conclusion:
- The Rajasthan High Court clarified that even though the services were received by Savio Jewellery during an exhibition held outside India, they were taxable under GST because the recipient (assessee) was registered in India.
- This case underscores the application of GST under the reverse charge mechanism for services received from suppliers located outside India, where the recipient is liable to pay tax in India.
- It highlights the importance of understanding the place of supply rules and the obligations under GST, especially for businesses participating in events or receiving services from international suppliers.
Relevant Section : 5 & 13 of CGST Act
