Supply of Service outside India, What is the applicability of GST ?

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 Case 1-  What is Applicability of GST if Mr. S.K. Gupta has Proprietorship Firm In the Name of Gupta & Sons in Jaipur. The Firm Registered under GST in the State of Rajasthan, manufactures Taxable Products. The Firm Also Provides Taxable Consultancy Services.

Mr.  S.K. Gupta has provided the consultancy services to his brother- Mr. G.K. Gupta ( Located in USA ) without any consideration. The Products Manufactured by Mr. S.K. Gupta similar to the ones Manufactured by Mr. G.K. Gupta. Mr S.K. Gupta charges Rs. 4,00,000 for providing similar consultancy services to other independent customer located in USA.



Consultancy services to Mr. G.K. Gupta ( Located in USA ) has been provided without consideration. activity without consideration is not a supply in terms of section 7(1)(a) of the CGST Act, 2017. However, Schedule I to the CGST Act, 2017 enlists the activities to be treated as supply even if made without consideration. Accordingly, Para2. of Schedule I treats supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance f business as a supply even if made without consideration.

However, a brother who is not dependent on the person supplying the service, does not come within the purview of term family as defined under section 2(49) of the CGST Act, 2017 and hence, is not related person. Therefore, the export of service to an independent brother without any any consideration will not fall under para 2. of the Schedule I to CGST Act,2017. Hence, the activity is not a supply and is thus, not liable to a any tax. 


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