IGST refund denial overturned for market research services export incorrectly classified as intermediary under Section 2(13)

HC ruled in favor of petitioner regarding IGST refund denial on export of market research services. Revenue authorities incorrectly classified petitioner as intermediary under Section 2(13) IGST Act. Court held petitioner directly provided market research services to Japanese client, not arranging/facilitating third-party services. Since petitioner rendered services independently rather than as intermediary, denial of integrated tax refund was unjustified. Appellate authority's order lacked proper consideration of facts specific to market research services versus business support services.

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Issues involved:
The judgment involves the denial of integrated tax refund based on the classification of the petitioner as an intermediary, and the failure of the appellate authority to consider the specific claim for refund related to Market Research Services.

Denial of integrated tax refund - Intermediary classification:
The petitioner, an Indian company, sought a refund of integrated tax on zero-rated supply provided to OHMI Industries Ltd., Japan. The Adjudicating Authority rejected the refund application, deeming the petitioner as an intermediary due to providing support directly to OHMI's customers. However, the petitioner contended that it rendered Market Research Services independently and not as an intermediary. The Court noted that the petitioner's appeal was solely for the refund related to Market Research Services, which the appellate authority failed to acknowledge. The Court emphasized that the petitioner's activities did not align with the definition of an intermediary under the IGST Act, as the petitioner provided services directly to OHMI, Japan without arranging or facilitating supplies from a third party.

Court's reasoning and conclusion:
The Court analyzed the scope of work under the Market Research Services Agreement and found that the petitioner's activities did not facilitate the supply of services between OHMI, Japan, and its customers in India. Referring to the definition of an intermediary under the IGST Act, the Court highlighted that the petitioner, by providing Market Research Services on its own account, did not meet the criteria of an intermediary. Additionally, the Court cited a relevant Circular that clarified the concept of intermediary services requiring a minimum of three parties, which was not applicable in the petitioner's case. Relying on a previous decision, the Court allowed the petition, set aside the impugned order, and directed the respondent to process the petitioner's claim for the refund of integrated tax related to Market Research Services, along with applicable interest.

This summary provides a detailed overview of the judgment, highlighting the key issues, the Court's analysis, and the final decision rendered in favor of the petitioner.

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