TaxTMI 
TaxTMI 
2023 (8) TMI 1264
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....ation has been allowed, consequence being, declining of the refund of the tax paid by the petitioner. 3. The question which falls for determination is as to whether the services rendered by the petitioner of providing Satellite derived 3D model services, would fall within the purview of "export of services" as defined under Section 2(6) of the IGST Act or would be categorized as Online Information Database Access or Retrieval services as defined under Section 2(17) of the IGST Act, in the context of Section 13 of the IGST Act. 4. The relevant facts as averred in the petition are:- The petitioner isa company incorporated under the Companies Act, 1956. The petitioner entered into a Service Agreement dated 09 September, 2019 with M/s. Emirates Defence Industries Co. PJSC, which was inter-alia in regard to providing of service of production of 3D city models of three cities being Abudhabi, AL Ain, AL Dhafra as per the specifications provided by M/s. Emirates Defence Industries Co. PJSC. The relevant clauses of the service agreement entered between M/s. Emirates Defence Industries Co. PJSC and the petitioner are as under:- "1. SCOPE OF SERVICES: The Scope of serv....
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....r (ADDA) and in accordance with clause 6.3 219,666.67 2. Submission of Abu Dhabi City 2 31^st October, 2019 3. Submission of AI AIN City 1 31st October, 2019 219,666.67 4. Submission of AI AIN City 2 28^th November, 2019 5. Submission of AI Dhafra Final 28^th November, 2019 219,666.67 Total 659,000.00 WHEREAS: (A) The Consultant is engaged in the business of providing Satellite derived 3D model services and has considerable skill, knowledge and experience in this field to perform such services. (B) In reliance upon the representations, skill, knowledge and experience of the Consultant, EDIC has agreed to engage the Consultant to provide the Services (as defined below) to EDIC and any of its Affiliates designated by EDIC in writing for this purpose, and the Consultant has agreed to accept the engagement on the terms and conditions set out in this Agreement." 5. The petitioner has contended that to provide technical service, the petitioner imported Very High Resolution (VHR) stereo satellite images from one M/s. 4 Earth Intelligence Limited. In terms of....
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....rcise culminated into the department reviewing the refund sanction order dated 05 February, 2021 in passing an order dated 26 August, 2021. By such order, it was concluded that the refund order was not legal and proper. The Assistant Commissioner, CGST & Central Excise, Mumbai South consequently ordered that the Deputy Commissioner shall file an appeal along with the copies of relevant documents before the appellate authority for the determination of following points:- "(a) Whether the services supplied by the respondent are export of services in terms of provisions of Section 2(6) of the IGST Act, 2017, or not. (b) Whether, after taking into consideration the facts and circumstances of the case, the said order of Deputy Commissioner, Division - II, CGST & CX, Mumbai South is legal and proper. (c) Whether the refund erroneously granted by the Adjudicating Authority needs to be recovered alongwith due interest. (d) Any other order so deemed appropriate by Appellate Authority." 10. In pursuance of the review order dated 26 August, 2021 passed by the Assistant Commissioner, respondent no. 2 filed a GST appeal before the appellate authority, namel....
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....al so far has not been set up. On merits it is contended that the impugned order is legal, valid and proper and would not require interference of this Court. In opposing the petitioner's case in the petition, it is contended that the petitioner has obtained GST registration for providing (i) survey & mapping service; (ii) IT software services and; (iii) OIDAR Services. It is contended that the nature of the services provided by the petitioner were ascertained and the same were related to IT Services of 3D model creation falling within the definition of OIDAR service under Section 2(17) of the IGST Act. The affidavit states that such nature of service provided by the petitioner was also confirmed by Shri Sanket Shah, Accountant of the petitioner during his statement dated 26 July, 2021. It is contended that the agreement between the petitioner and M/s. Emirates Defense Industries Company PJSC was examined which revealed that the said agreement was for supply of satellite derived 3D city model of Abu Dhabi City by the petitioner. It is contended that as per Section 13(12) of the IGST Act, the place of supply of online information and database access or retrieval services shall be the....
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....ates Defence Industries Co. PJSC and the petitioner. It is his submission that from the plain reading of the agreement, it was clear that the nature of the agreement between the parties was clearly an agreement for export of service whereunder the parties had clearly defined the scope of services in Schedule 1, which was inter-alia for the supply of satellite derived 3D City model of Abu Dhabi Emirate with particular specifications. It is submitted that the petitioner had fully complied with the requirement of Section 13(12) of the IGST Act, as also the case of the petitioner fully fell within the definition of export of service as defined under Section 2(6) of the IGST Act, whereby the petitioner complied with all the sub-clauses (i) to (iv) as falling under the said definition. Mr. Raichandani has also submitted that the location of recipient of service of the present case was a party located outside the Indian territory. Our attention is also drawn to the invoices under which the petitioner has received amounts in convertible foreign exchange, which according to him clearly indicate that the buyer of services was Emirates Defence Industries Company, Abu Dhabi entities in U.A.E. ....
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....erefore contended that the impugned order would not call for interference. Analysis :- 18. On the above conspectus, we have heard learned counsel for the parties and with their assistance, we have perused the record. 19. At the outset, as the claim of the petitioner is of export of service, we are required to note the relevant provisions of the IGST Act namely the definition of 'export of service', [Section 2(6)]; 'location of recipient of service', [Section 2(14)]; 'online information and database access or retrieval services' (OIDAR) [Section 2(17)]; and Section 13 where place of supply of service where location of supplier or location of recipient is outside India. These provisions read thus: "Section 2 - Definitions (6) "export of services" means the supply of any service when,-- (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 [or in Indian rupees wherever permitted by the Reserve Bank of India]; ....
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....ailable in the ordinary course of business, the place of supply shall be the location of the supplier of services. (3) The place of supply of the following services shall be the location where the services are actually performed, namely:- (a) services supplied in respect of goods which are required to be made physically available 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 servic....
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...., the expression,-- (a) "account" means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account; (b) "banking company" shall have the same meaning as assigned to it under clause (a) of section 45A of the Reserve Bank of India Act, 1934 (2 of 1934); (c) ''financial institution" shall have the same meaning as assigned to it in clause (c) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934); (d) "non-banking financial company" means,-- (i) a financial institution which is a company; (ii) a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or (iii) such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette, specify. (9) The place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such....
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....engaged in the business of providing Satellite derived 3D model services and has considered skill, knowledge and experience in the field to perform such services and on such representation, the Emirates Defence Industries Co. PJSC had agreed to engage the petitioner to provide the services as defined in the Agreement to "EDIC and any of its Affiliates" designated by Emirates Defence Industries Co. PJSC. 21. As clearly seen from Schedule-I of the agreement defining the 'Scope of services' as also the 'Delivery Schedule and Deliverables' and the Fee Clauses namely the "Fees and Expenses" and "Payment Schedule", which we have extracted in the foregoing paragraphs, it is clear that supply of service was to be made to M/s. Emirates Defence Industries Co. which was not located in India. Also the place of supply of service was agreed to be outside India, as also the payment of such services was being received by the petitioner/supplier of service in convertible foreign exchange. 22. Further, the establishment of the petitioner (supplier of service) and the recipient of service (Emirates Defence Industries Co.) were not establishments of distinct person under Explanation 1 below Sect....
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....services as set out in clauses (i) to (vii) in the definition of OIDAR. 24. Thus, in our opinion, if the interpretation to the Agreement in question as rendered by the respondents is to be accepted, it would lead to an absurdity inasmuch as any communication of information or providing of service through the medium of emails or any electronic transfer of data would be required to be held as OIDAR service, which is certainly not the purport and meaning an OIDAR service as defined under Section 2(17) of the Act. 25. In the present case, there is clearly an agreement of the petitioner with a party, which is a foreign party, whose location is outside the Indian territory. The agreement is clearly for a specialised work of providing 3D city models of Abudhabi, AL Ain, AL Dhafra. These are not works which would be freely available on the internet and / or are materials of the nature Section 2(17) would contemplate. Also undoubtedly the consideration as received by the petitioner for providing of such service is received in convertible foreign exchange, although through the foreign recipients / representative M/s. Bayanat LLP, as it is not the case of the department that such amount....
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....e petitioner, the Supreme Court has held that it is well settled principle that the Court, while interpreting the terms of the agreement, would be required to look to the substance rather than the form of the agreement and that the true relationship of the parties has to be gathered from the nature of the contract and its terms and conditions. Thus, applying such well settled principle in interpretation of the terms and conditions of the agreement in question, we may observe that the purport and intent of the agreement in question has been totally misconstrued by the appellate authority. Further from the reading of the impugned order, we also note that meager reasons as set out in the impugned order were certainly not sufficient for the Appellate Authority to reach to a conclusion that the services in question was not export of service so as to deny the petitioner's the referred claim. 30. In the light of the above discussion, we are certain that the petition need to succeed. It is accordingly allowed in terms of prayer clauses (a) to (c) which read thus:- "a) that this Hon'ble Court be pleased to issue a Writ of certiorari / mandamus or any other appropriate Writ / ord....