GST on Indian intermediary services provided to a Foreign Customer

[Vinay Kunte]

Hello

It is been a practice of most of the learned Consultants to advice the clients to pay CGST+SGST on the Intermediary Services provided by a registered taxpayer to his customers located outside India as of today. but, with the recent judgement of Bombay (Mumbai) high court in the (Writ Petition No. 2031 of 2018 dated June 06, 2023) matter related Dharmendra M. Jani v. Union of India - 2023 (6) TMI 290 - BOMBAY HIGH COURT has held that the provisions of Section 13(8)(b) and Section 8(2) of Integrated Good and Service Tax Act, 2017 ("the IGST Act") are legal, valid and constitutional. However, the said sections are confined to the provisions of IGST Act only and the same cannot be made applicable for the levy of tax on services under the Central Goods and Service Tax Act, 2017 (:the CGST Act") and the Maharashtra Goods and Service Tax Act 2017("the MGST Act")

So kindly guide me to decide now in relevance to the above judgement, whether the taxpayer should now charged IGST as per section 5 of IGST Act or continue to Charge CGST+SGST on the intermediary services provided to his clients located outside India?

Your guidance has always been vary valuable to us. Please give your opinions / views in the matter.

AI Summary

GST on intermediary services: uncertainty over IGST versus CGST+SGST continues; consider paying under protest pending finality.
The Bombay High Court upheld the constitutional validity of Section 13(8)(b) and Section 8(2) of the IGST Act but limited their application to the IGST Act, producing divergent reasonings that nevertheless resulted in a conclusion that CGST and SGST were not payable in the contested cases. Practitioners recommend preserving options: continue paying CGST+SGST under protest (to protect refund rights), consider IGST only if appropriate, explore provisional assessment or refund claims, and first verify that services meet the statutory definition of intermediary.