Principal-to-principal marketing support is not intermediary service, so overseas supply qualifies as export of service.

Marketing support services supplied to an overseas entity were held not to constitute intermediary services under the Place of Provision of Services Rules, 2012 because the provider acted on a principal-to-principal basis, had no authority to bind the foreign recipient, and could not accept or reject orders on its behalf. The services were limited to pre-sales support and information, with customer orders placed directly in the foreign entity's name. As the intermediary definition was not attracted, the place of provision remained the recipient's location outside India under Rule 3, and the services qualified as export of service. The service tax demand could not be sustained.

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Issues: Whether the marketing support services provided to the foreign entity constituted intermediary services so as to fall outside the scope of export of service under the Place of Provision of Services Rules, 2012.

Analysis: The agreement showed that the appellant only provided pre-sales marketing support and information to the overseas entity, had no authority to bind it in legal transactions, could not accept or reject orders on its behalf, and all customer orders were to be received directly in the name of the foreign entity. On this contractual structure, the appellant acted on a principal-to-principal basis and not as a broker or agent facilitating a supply between two other persons. The definition of intermediary under Rule 2(f) of the Place of Provision of Services Rules, 2012 was therefore not attracted, and the applicable place of provision remained that under Rule 3, namely the location of the recipient outside India. The Tribunal also followed its earlier consistent view that similar marketing support arrangements are not intermediary services.

Conclusion: The services were not intermediary services and were eligible to be treated as export of service. The demand of service tax could not be sustained.

Ratio Decidendi: A service provider acting on a principal-to-principal basis, who merely supplies marketing or sales-support information without authority to bind the foreign recipient or facilitate a supply between two other persons, does not render intermediary service under the Place of Provision of Services Rules, 2012.

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