Intermediary services test: principal-to-principal subcontract for overseas client held to be export of services, preserving Rule 5 refund.

Services performed for an overseas client's customers under a principal-to-principal subcontract were not intermediary services because there was no contractual nexus with those customers and remuneration came only from the overseas client. Applying the jurisdictional High Court's treatment of the same agreement structure and the departmental clarification that the intermediary concept is similar under the service tax and GST regimes, the services were treated as export of services. The place of provision did not shift to India, so export benefit was not denied and refund of accumulated Cenvat credit under Rule 5 was allowable.

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Issues: Whether the services provided by the assessee to its overseas client's customers were intermediary services so as to deny export benefit and refund of accumulated Cenvat credit.

Analysis: The assessee provided services to its overseas client under a principal-to-principal subcontract, had no contractual nexus with the overseas client's customers, and was remunerated only by the overseas client. The same agreement structure had already been held by the jurisdictional High Court not to create an intermediary arrangement, and the departmental circular clarified that the intermediary framework under the service tax and GST regimes is similar. Following that binding and persuasive line of authority, the services could not be treated as intermediary services and the place of provision did not shift to India for denial of export benefit.

Conclusion: The assessee was not an intermediary, the services qualified as export of services, and the refund under Rule 5 was allowable.

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