TaxTMI 
TaxTMI 
2022 (7) TMI 645
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....respondents to forthwith implement the order-in-appeal dated 18.08.2021 passed by Joint Commissioner (Appeals-II), CGST and Central Tax, Mumbai. By this order a Joint Commissioner (Appeals) has granted refund of Rs.1,02,74,14,843/- to Vodafone Idea Limited. 2. Impugning the said order dated 18.08.2021 passed by the Joint Commissioner (Appeals), Revenue has filed a writ petition being writ petition (L) No. 12860 of 2022. Revenue is seeking a writ of certiorari and praying for quashing the said order dated 18.08.2021. By the said order, the Joint Commissioner has disposed two appeals being appeal Nos. 257 of 2021 and 258 of 2021 (hereinafter referred to as the "said appeals"). Appeal No. 257 of 2021 pertains to period - May 2019 to June 2019 concerning refund of Rs.50,30,92,587/- and Appeal No. 258 of 2021 concerning refund of Rs. 52,43,22,256/- pertains to period July 2019 of to September 2019. 3. Since we felt, if revenue's petition is admitted and we grant a stay to the impugned order, then the question of considering Vodafone Idea Limited's petition for refund would not arise. Therefore, we took up the petition filed by revenue as main petition. 4. Though the petitio....
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....9, Vodafone Idea Limited filed applications dated 26.03.2021 and 20.05.2021 for refund of integrated tax paid on export of services under Form RFD- 01A in accordance with the provisions of Section 54 of the "Central Goods and Service Tax Act, 2017" (for brevity "CGST Act") read with Rule 96 of the "Central Goods and Service Tax Rules, 2017" (for brevity "Rules"). Vodafone Idea Limited also submitted various documents along with the said applications. Subsequently deficiency memos were issued by respondent Nos. 3 and 4 and Vodafone Idea Limited was called upon to submit documents mentioned therein. Vodafone Idea Limited, vide letters dated 28.04.2021 and 18.05.2021, complied with the deficiencies and submitted the documents. 10. Respondent No.4 issued two show-cause-notices dated 14.06.2021 and 06.07.2021 calling upon Vodafone Idea Limited to show cause as to why its refund claims, for reasons mentioned in the show cause notices, should not be rejected. Respondent No.3, by a letter dated 22.06.2021, also called upon Vodafone Idea Limited to submit its explanation on the issues raised therein. Vodafone Idea Limited by letters dated 29.06.2021 and 13.07.2021 replied to the s....
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....or ('HO') is licensed to provide telecom services only in the Telecom Circle of it's country and Foreign Telcom Operator ('FTO') is licensed to provide services in the Telecom Circle of respective country. Further, HO and FTO have entered into a roaming arrangement whereby a subscriber of HO, travelling to New York would be able to use the network of FTO, without being a telecom subscriber therein of FTO and when a subscriber of FTO travels to India, he/she will be able to seamlessly latch on to the network of HO and continue to use telecom services in India. Depending upon the usages of the subscriber and the arrangement between HO and FTO, FTO and HO would issue invoices on each other. Further, they would in turn recover service charges from their respective customers. The services are contractually provided by HO and FTO's for allowing it's operators to make / receive calls while roaming. For these services, HO raises invoice on FTO's. In the given case, Vodafone Idea Ltd is the Home Operator and hence, Vodafone Idea Ltd raises invoices on FTO's. For supply of above mentioned services, Vodafone Idea Ltd fulfills all ....
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....oaming services. Therefore, it is pertinent that a legal and balanced view is adopted in the interest of justice. 6. Therefore, the said roaming services technically and legally qualify as export of service. 16. Mr. Mishra submitted that, Export of services is defined in IGST Act in Section 2(6) where the following 5(five) conditions have been prescribed as necessary for a supply to qualify as export of service: (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (iii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; One of the five conditions for a supply of service to be considered as "export of service" is that the place of supply of service is outside India." 17. Mr. Mishra submitted that the main condition is the place of supply of services outside India. According to Mr. Mishra since the cust....
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....le by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services: Provided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services: [Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs or for any other treatment or process and are exported after such repairs or treatment or process without being put to any use in India, other than that which is required for such repairs or treatment or process];" (b) services supplied to an individual, represented either as the recipient of services or a person acting on behalf of the recipient, which require the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services. xxxxxxxxxxxx Section 2(24) of the IGST Act, 2017 (24) words and expressions used and not defined in this Act but defined in the Cent....
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.... (xvii) liability to pay in certain cases; (xviii) advance ruling; (xix) appeals and revision; (xx) presumption as to documents; (xxi) offences and penalties; (xxii) job work; (xxiii) electronic commerce; (xxiv) transitional provisions; and (xxv) miscellaneous provisions including the provisions relating to the imposition of interest and penalty, shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in relation to central tax as if they are enacted under this Act: Provided that in the case of tax deducted at source, the deductor shall deduct tax at the rate of two per cent from the payment made or credited to the supplier: Provided further that in the case of tax collected at source, the operator shall collect tax at such rate not exceeding two per cent, as may be notified on the recommendations of the Council, of the net value of taxable supplies: Provided also that for the purposes of this Act, the value of a supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than thi....
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....on 2(93) is applicable when no consideration is payable. In this case consideration is payable by the FTO for the services rendered to it. We find the adjudicating authority in his orders does refer to the terms of agreements with FTO. The services are rendered under agreements with the service recipients and according to the agreement, Vodafone Idea Ltd is contractually obligated only to the FTOs for the services under the agreement; the consideration is payable by the FTOs and the consideration is payable in convertible foreign exchange. There is no mention of any agreement with subscriber of FTO. Vodafone Idea Ltd has reiterated that there is no contract with subscriber of FTO making it liable to pay value of service to Vodafone Idea Ltd. We find that practically it is impossible for Vodafone Idea Ltd to have contract with subscriber of FTO. Therefore, the subscriber is not liable to make any payment to Vodafone Idea Ltd. In the impugned order it is stated "as per the agreement reproduced in para 16.1 (Appeal No.257/2021) and 13.1 (Appeal No.258/2021) of the impugned orders with M/s. Cello Partnership or M/s. Verizon Wireless USA D/B/A, for provision of service is payable by FTO....
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....is in India using the appellants telecom net work. The consideration for the service rendered is paid by the foreign service provider. There is no contract/agreement between the appellant and the subscriber of the foreign telecom service provider to provide any service. Since the contract for supply of service is between the appellant and foreign telecom service provider who pays for the services rendered, it is the foreign telecom service provider who is the recipient of the service. From the provisions of law relating to GST in UK and Australia, relied upon by the appellant, this position becomes very clear. Your customer's customer is not your customer. When a service is rendered to a third party at the behest of your customer, the service recipient is your customer and not the third party. For example, when a florist delivers a bouquet on your request to your friend for which you make the payment, as far as the florist is concerned you are the customer and not your friend. 5.2. Export of Service Rules, 2005 defines export in respect of taxable services. For this purpose, the services have been categorized into 3. Category I deals with specified services provided in rel....
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....and not the place of performance. In this context, the phrase 'used outside India' is to be interpreted to mean that the benefit of the service accrues outside India. Thus for category III services, it is possible that export of service may take place even when all the relevant activities take place in India so long as the benefits of these services accrue outside India. Thus what emerges from the above circular is that when the appellant rendered the telecom service in the context of international roaming, the benefit accrued to the foreign telecom service provider who is located outside India since the foreign telecom service provider could bill his subscriber for the services rendered. This is the practice followed in India also. When an Indian subscriber to, say, MTNL/BSNL goes abroad and uses the roaming facility, it is the MTNL/BSNL who charges the subscriber for the telecom services including service tax, even though the service is rendered abroad by the foreign telecom service provider as per the agreement with MTNL/BSNL. 5.4 The Paul Merchant's case (supra) relied upon by the appellant dealt with an identical case. The question before the Tribunal in that....
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....ndia. They have a subsidiary company in Singapore. The appellant booked orders for the sales of the goods manufactured by the subsidiary situated in Singapore. For this purpose, they received certain commission and initially they paid the Service Tax. Later they realized that as they had exported the service, they would not be liable to pay Service Tax. Hence, they requested for refund of the amount. The refund was rejected by the Original Authority. The rejection order has been upheld by the Appellate Authority. Both the Original Authority and Appellate Authority have held that the service has been rendered in India and it has been utilized delivered in India and it is also used in India. The learned Advocate strongly argued that the understanding of the lower authority is not correct, the services have rightly been delivered abroad and they have been used by the Singapore Company. They relied on several case laws. They also stated that it should not be considered that the appellant and the company in Singapore are related, even though one is a subsidiary of the other, they are separate legal entities. They produced a large number of case laws on this subject. Th....