Order date – 30 June 2022

Facts – 

• The applicant, M/s. NSK Ship Management Private Ltd., is a company registered in India and is engaged in providing support services relating to vessel management to its group company, namely New Shipping Kaisha Ltd, (‘NSKJ’) Japan.
• NSKJ manages vessels which are carrying the country flag of Panama (7 vessels) and the British Cayman Islands (3 ships). These ships are foreign going vessels, and on a world-wide route. During their voyage, these ships can be stationed at various ports and seas around the world and on occasions also call Indian ports.
• In this regard, the applicant has entered into a contract with NSKJ for providing various support services in relation to these vessels to NSKJ. The applicant charges a fixed management fee of USD 7200/- per month per vessel for providing these support services to NSKJ.

Issue – 

• Whether the vessel support services provided by the applicant to its group company outside India qualify as “Export of services” under GST?

Order – 

• The authorities observed that as per the provisions of Section 13(6) of the IGST Act, when services requiring the physical availability of the vessel are supplied in taxable territory along with other non-taxable locations, the “Place of Supply” will be the “Location in the Taxable territory”. 
• In cases where the vessels do not enter any of the location in the taxable territory and the entire services relating to water transport of the vessels are extended in locations outside the taxable territory then, in such cases, the services extended are “Export of Services”.
• Therefore it was held that the vessel support services provided in relation to foreign vessels sailing to other countries outside India, falls under “Export of Services” as per Section 2(6) of the IGST Act as the “Place of Supply” in such cases is entirely “Outside India”
• And if such vessels are calling at the Port in India, then the Place of Supply in respect of that vessel is in India as per Section 13(6) of the IGST Act 2017 and the services rendered to that vessel is not 'Export of Service'.