Espon Inc. is an entity incorporated in USA and is engaged in provision of various information technology related services directly as well as…

Espon Inc. is an entity incorporated in USA and is engaged in provision of various information technology related services directly as well as through its subsidiaries located across the world. In India, Espon India, a subsidiary of Espon Inc., is registered under GST in the State of Karnataka under GST and is providing services to various customers in India. Espon Inc. provides cloud-based storage services to its customers (business entities and non-business entities) in India. The customers can subscribe to the services by making online payment directly to Espon Inc.'s bank account through internet banking and other modes. The terms and conditions for such services are entered between Espon Inc. and the customer directly without involvement of any third party. In case of any issue, the customers can call and log the issue at the customer help centre which is operated by Espon India on principal to principal basis. For operation of such customer help centre, Espon India is paid on cost plus 10% basis by Espon Inc. on monthly basis. Further, Espon India is engaged in promotion and marketing of cloud-based storage services on principal to principal basis in India for Espon Inc. The payment for such services is made by Espon Inc. to Espon India on monthly basis at cost plus 20%. The promotional and marketing activities are carried out in the name of Espon Inc., without any reference to operations of Espon India. Espon Inc. owns online space for advertisement on internet. Espon Inc. has agreed to sell such online advertising space to Espon India for an amount of 5,00,00,000 per month. Espon India sells such advertising space to its customers in India on its own account. The contractual arrangement for sale of such advertising space is between the customer and Espon India. Espon Inc. provides technology support to Espon India and charges royalty from Espon India for such technology support at a fixed charge of 25,00,000 per month. The royalty paid is exclusively related to the business of advertising space of Espon India. In addition to above information, during the month of January: (I) Espon India has incurred following expenses: Expenses exclusively related to operation of call centre - 75,00,000Expenses exclusively related to promotion and marketing services for Espon Inc. - 50,00,000 (II) Espon India earned an income of 8,00,00,000 from sale of online advertising space in India. (III) Espon Inc. earned an income of 10,00,00,000 from non-taxable online recipient customers, from cloud-based storage services in India. The opening balance of input tax credit for the relevant tax period for Espon India and Espon Inc. is nil. Note: In the aforesaid case scenario, (i) GST is applicable on all inward and outward supplies @ 18% (ignore bifurcation of intra-State and inter-State supply) unless otherwise specified: (ii) Subject to the information given above, assume that all the other conditions necessary for availing ITC have been fulfilled. (iii) All the amounts are exclusive of GST, wherever applicable, unless otherwise provided. (iv) Exports made by Espon India, if any, are through furnishing of LUT without payment of IGST. Based on the facts of the case scenario given above, choose the most appropriate answer to Q. Nos. 6 to 8 below: