Intermediary Services Test: overseas procurement support treated as principal-to-principal supply, sustaining import tax and defeating refund.

Procurement support services supplied by an overseas entity were held to be rendered on its own account as substantive procurement services, not as intermediary services, because the arrangement did not amount to mere facilitation between two parties. On that basis, the special place-of-supply rule for intermediaries did not apply; the transaction was treated as an import of services and the general rule under Section 13(2) governed, placing the supply in India. The refund claim for IGST paid earlier was not barred merely because payment had been made under a mistaken view, but it failed on merits because the import of services remained taxable.

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Issues: (i) Whether the procurement support services rendered by the overseas entity were intermediary services under the IGST Act; (ii) whether the place of supply was governed by Section 13(2) or Section 13(8)(b) of the IGST Act; (iii) whether the appellant was entitled to refund of the IGST paid on the transaction.

Issue (i): Whether the procurement support services rendered by the overseas entity were intermediary services under the IGST Act.

Analysis: The definition of intermediary requires a person to arrange or facilitate a supply between two or more persons, and excludes a person who supplies services on its own account. The Tribunal applied the statutory test, the CBIC circular on intermediary services, and the surrounding contractual features, including the overseas entity's role as a centralized procurement hub. It found that the services were rendered on the overseas entity's own account as substantive procurement services, not as mere ancillary facilitation, and that the arrangement did not fall within the intermediary category.

Conclusion: The services were not intermediary services.

Issue (ii): Whether the place of supply was governed by Section 13(2) or Section 13(8)(b) of the IGST Act.

Analysis: Once the services were held not to be intermediary services, the special place-of-supply rule in Section 13(8)(b) ceased to apply. The Tribunal treated the transaction as an import of services and held that the general rule under Section 13(2) governed the place of supply.

Conclusion: The place of supply was in India and not under Section 13(8)(b).

Issue (iii): Whether the appellant was entitled to refund of the IGST paid on the transaction.

Analysis: The Tribunal held that a refund claim cannot be rejected merely because tax had earlier been paid under a mistaken understanding of liability. The refund framework under Section 54 of the CGST Act and Rule 89 of the CGST Rules permits such claims subject to the statutory conditions, and the earlier tax payment did not by itself bar the claim. However, on merits, since the transaction was held to be taxable as an import of services, the refund claim failed.

Conclusion: The appellant was not entitled to refund.

Final Conclusion: The appeals failed on all substantive issues and the orders rejecting refund and confirming taxability were sustained.

Ratio Decidendi: A service provider acting on its own account and supplying substantive procurement support on a principal-to-principal basis is not an intermediary; consequently, Section 13(8)(b) of the IGST Act does not apply, and refund cannot be granted where the tax liability on the import of services is sustained.

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