Intermediary service test turns on actual role, not labels, and principal-to-principal support services may qualify as export of service.

Marketing and support activities were held not to constitute intermediary service where the agreement, read with the actual functions performed, did not show authority to conclude contracts for the overseas entity. Mere use of the labels "commercial agent" or "intermediary" was insufficient; an intermediary must arrange or facilitate a supply between at least three parties and not provide the main service on its own account. A cost-plus pricing model did not, by itself, establish intermediary status. On these facts, the service was treated as supplied on a principal-to-principal basis and qualified as export of service, so the service tax demand could not be sustained.

---

---

Issues: Whether the appellant's marketing and support activities amounted to intermediary service or export of service.

Analysis: The dispute turned on the true character of the agreement and the actual nature of the services rendered. Mere use of the words "commercial agent" or "intermediary" in the agreement was held insufficient. The essential attributes of an intermediary are that the person arranges or facilitates a supply between two or more persons, there are at least three parties, and the person does not himself provide the main service on his own account. The agreement did not show that the appellant was authorised to conclude contracts on behalf of the overseas entity, and the consideration was on a cost-plus basis, which did not by itself establish intermediary status. On these facts, the appellant was treated as providing its own service on a principal-to-principal basis, and the service qualified as export of service.

Conclusion: The activity was not intermediary service and the demand of service tax could not be sustained.

---