Marketing and technical support under master service agreement for foreign client held not "intermediary" u/s2(13); refund allowed.

The dominant issue was whether marketing support and technical support services supplied to a foreign recipient under a master service agreement constituted "intermediary services" under s.2(13) of the IGST Act, thereby disentitling refund of accumulated input tax credit. On construing the agreement and contemporaneous records, the HC held the supplier was providing services on its own account and not arranging or facilitating supply between third parties; the supplies therefore qualified as export of services. Consequently, the adjudication and appellate orders treating the supplies as intermediary and raising IGST demand were quashed, and the tax authorities were directed to grant/sanction the claimed refund.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the "Marketing Support Services" and "Technical Support Services" provided under the relevant service agreement were correctly classified as "intermediary services" for purposes of determining place of supply.

(ii) Whether, on the facts and documents examined by the Court, the impugned supplies qualified as "export of services", thereby entitling the supplier to refund of accumulated input tax credit.

(iii) Whether the rejection of the refund claim and confirmation in appeal were legally sustainable, and if not, whether the Court should direct refund with applicable interest within a fixed time.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i) & (ii): Classification as "intermediary services" vs. "export of services" and refund entitlement

Legal framework (as discussed in the judgment): The adjudicating and appellate authorities proceeded on the basis that if the services were "intermediary services", the place of supply would be the location of the supplier in India, resulting in failure of the "place of supply outside India" condition for "export of services", and consequently denial of refund. The Court addressed the same core classification question as decisive for export/refund eligibility.

Interpretation and reasoning: The Court examined the material on record, including the relevant master/service agreement(s) and related documents, and found that they "clearly indicate" the supplier was not an intermediary. The Court accepted the contention that the services supplied amounted to export of services and held that the contrary conclusion reached by the adjudicating authority and the appellate authority could not be sustained. In arriving at this conclusion, the Court applied and followed the legal position emerging from prior decisions of the same Court (as relied upon in the judgment) to the facts of the present service arrangement.

Conclusions: The impugned services were held not to be intermediary services; they were held to amount to export of services. Consequently, the supplier was held entitled to the refund claimed for the relevant period.

Issue (iii): Validity of refund rejection and relief of refund with interest

Interpretation and reasoning: Since the foundational basis for rejection-classification as intermediary and consequent denial of export status-was found incorrect on the Court's assessment of the agreement and documents, the Court held that the adjudication order rejecting refund and the appellate order affirming it deserved to be quashed.

Conclusions and directions: The Court set aside both the order rejecting the refund claim and the appellate order. The Court directed the respondents to refund/grant/sanction the amount of Rs. 18,92,697/- together with applicable interest, and to do so expeditiously and in any event within three months from receipt of the order.

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