2026 (1) TMI 145 - HC - GST

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 ... Refund of accumulated input tax credit - Marketing Support Services and Technical Support Services provided by the petitioner to Excel point Singapore under the Agreement - intermediary services u/s 2(13) of the IGST Act or not - HELD THAT:- A perusal of the material on record comprising of Master Service Agreement dated 01.04.2014 entered into by the petitioner with its foreign / parent company in Singapore and other documents will clearly indicate that petitioner is not an intermediary and the service supplied by the petitioner amount to export of services. The impugned order of Adjudication Authority deserves to be quashed and the respondents be directed to refund / grant / sanction refund in favour of the petitioner as sought for in the petition and by quashing the demand of IGST made against the petitioner. The impugned order-in-original passed by respondent No.2 and the order-in-appeal passed by respondent No. 1 are hereby set aside - Petition allowed. Issues: (i) Whether the services described as Marketing Support Services and Technical Support Services rendered by the petitioner qualify as 'intermediary services' under Section 2(13) of the IGST Act, 2017; (ii) Whether those services qualify as export of services under Section 2(6) of the IGST Act, 2017 and whether the petitioner is entitled to refund of Rs. 18,92,697/- claimed under Section 54 of the CGST Act, 2017.Issue (i): Whether the petitionerprovides intermediary services under Section 2(13) of the IGST Act, 2017.Analysis: The agreement and factual matrix show three parties (overseas principal, petitioner, and Indian customers), and two distinct supplies (the principal's main supply of proprietary products and the petitioner's ancillary marketing/technical facilitation). The petitionerperforms activities of arranging/facilitating promotion and technical assistance for the principal's sales rather than supplying the main product on its own account. The CBIC Circular No. 159/15/2021-GST criteria on minimum three parties, two distinct supplies and the intermediary's subsidiary role apply to the facts. The appellate authority had earlier held the services to be intermediary in nature, but the High Court found that under the Master Service Agreement dated 01.04.2014 and relevant precedent the petitioneris not an intermediary.Conclusion: The issue of whether the services are intermediary services is answered in favour of the petitioner (not an intermediary).Issue (ii): Whether the impugned services qualify as export of services under Section 2(6) of the IGST Act, 2017 and whether the petitioner is entitled to refund of Rs. 18,92,697/- under Section 54 of the CGST Act, 2017.Analysis: Export of services requires satisfaction of all five conditions in Section 2(6), including that the place of supply be outside India. If services are intermediary in nature, Section 13(8)(b) makes place of supply the location of supplier (India), precluding export treatment. The adjudicating authorities had treated the services as intermediary and denied refund. The petitioner relied on this Court's recent decisions and its pre-GST CESTAT order; the High Court examined the Master Service Agreement of 01.04.2014 and found that the contract terms and applicable precedents support treatment of the services as export of services and that the petitioner is not liable to IGST. The High Court therefore concluded that the petitioner met the export conditions and that the refund claim within limitation was maintainable; respondents' orders rejecting the refund were set aside.Conclusion: The issue of export qualification and refund entitlement is answered in favour of the petitioner; the petitioner is entitled to refund of Rs. 18,92,697/- together with applicable interest.Final Conclusion: The impugned order-in-original and order-in-appeal rejecting the refund claim are quashed and the respondents are directed to sanction the refund of Rs. 18,92,697/- with interest within three months, thereby granting the substantive relief sought by the petitioner.