Service on principal to principal basis is not intermediary service
Service provided to foreign Principal on principal to principal basis is not intermediary service. For example, service of marketing consultant is not ‘intermediary service’, if he gets his fees at fixed rate and not on basis of turnover achieved.
In GoDaddy India Web Services P Ltd. In re (2016) 54 GST 681 = 67324 (AAR), assessee was providing various types of services as ‘bundled service’ to its foreign Principal. In addition to providing marketing and promotion service, assessee was also providing services of supervision of call centre services and payment processing services. It was held that the place of supply of service is outside taxable territory and hence service tax is not applicable.
In ABS India Ltd.v. CST (2008) 17 STT 223(CESTAT), assessee had subsidiary company in Singapore. Assessee-company booked orders in India for sale of goods manufactured by subsidiary in Singapore. Assessee received commission from its Singapore subsidiary. It was held that service was delivered to subsidiary. It cannot be said that service is delivered in India.