Who really is the Service Exporter – the Cauldron of Confusion of MSA SOW and Muli State Registrations

In a multi-State organisation, the GST registration that raises the invoice and receives the foreign exchange may not, by itself, conclusively establish that the same registration is the supplier of the service. The actual contractual, commercial and operational arrangement must establish which establishment is responsible for supplying the service.

This becomes critical where work is performed across Bangalore, Hyderabad, Pune or other locations. If another State establishment is found to be the actual supplier, the transaction could potentially be viewed as a domestic supply to the invoicing GSTIN, followed by an export by that GSTIN. The issue therefore extends beyond GST taxability to the fundamental conditions for export, foreign exchange realisation and consequential refund exposure. At the same time, transfer pricing must independently establish the arm's-length remuneration of the Indian enterprise in its dealings with the overseas associated enterprise. The objective is therefore not merely to align the invoice, but to ensure that the MSA, SOW, actual conduct, GST position, forex trail, refund claim and transfer pricing position tell one coherent commercial story.