Order Date – 16 April 2024

Facts –

• The Applicant, M/s Abans Alterative Fund Manager LLP, a SEZ Unit, is engaged in providing the services of holding securities and other assets of trusts and funds and similar financial entities.
• The applicant has availed the service from Advocate towards execution of lease agreement for premise in GIFT City, Gandhinagar. The applicant is the fund manager of Abans Investment trust.

Issue –

• Whether the applicant is required to pay tax under reverse charge mechanism on services received from advocate?

Order –

• The AAR observed that under notification No. 37/2017-CT, a unit in DTA can supply services to a unit in SEZ without payment of IGST subject to furnishing of LUT to the jurisdictional Commissioner.
• Hence, the applicant, an SEZ unit, can procure the legal services, sponsorship services etc., for use in authorized operations without payment of IGST provided the applicant, furnishes a LUT or bond as specified in condition (i) of para 1 of notification No. 31/2017-CT.
• Thus, it was ruled that the applicant, an SEZ unit, is not required to pay GST under RCM on specified services in accordance with notification No. 10/2017-IT(Rate) dated 28.6.2017 as amended from time to time, subject to furnishing a LUT or bond as specified in condition (i) of para 1 of notification No. 37/2017-CT.