The Tamil Nadu Authority for Advance Ruling (AAR) holds support services to overseas customers are not export services since the taxable territory is the location where services are actually performed.
The applicant, Translog Direct Private Limited, is engaged in providing support services to overseas shipping lines/ charterers in relation to operations of vessels of different shipping lines which are entering or exiting India. The Company offers its overseas customers a consolidated end-to-end solution by offering such services on its own account. The applicant approached AAR to clarify whether the āsupport serviceā would be considered an export service.
The applicant submitted that the services rendered are in the nature of assisting in the administration and managing the logistics or operation of the ship/vessel while entering or leaving the port of India. The services are provided to persons located outside India and is undertaken on a principal-to-principal basis and not as an intermediary. The applicant further submitted that the place supply is the place of the recipient of such service, which is outside India.
The Authority observed that the services are in the nature of āsupport servicesā rendered for facilitating the vessel of the service recipient to enter or exit the Indian port. The services extended are to enable the vessel to reach the port, leave the port and undertake repair or requirements of the vessel and crew when such vessel is in the Indian territory. Thus, the service extended intrinsically relies on the presence of the vessel in the Indian territorial water or port.
The Coram of Mr. T G Venkatesh, Additional Commissioner, and Ms. K Lata, Joint Commissioner, has held that the place of service is the location where the services are actually performed, which is the taxable territory. Therefore, the proposed supply is not an export of service.
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