TaxTMI 
TaxTMI 
2024 (9) TMI 409
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....en herein below: Appeal No. SCN and date Period involved Demands ST/60242/2022 No.-I-V(GST)Adj/ Sunrise/9/18/185 dated 20.04.2018 April 2015 to March 2016 Service tax of Rs.37,07,121/- along with interest u/s 75 and equal penalty u/s 78 of the Finance Act, 1994. ST/60241/2022 No. ADJ2/2/2019 -HQ-GST-CHD dated 22.04.2019 April 2016 to June 2017 Service tax of Rs.1,27,10,335/- along with interest u/s 75 and penalty of Rs.12,71,034/- u/s 76 of the Finance Act, 1994. 2. Briefly stated facts of the present case are that the Appellant are registered with the Service Tax department and are engaged in providing Visa Consultancy Services to its clients who wishes to settle down in the foreign countries. Inquiries were initiated against the Appellant by the department with respect to the various services rendered by the Appellant. On the basis of the information gathered, it was alleged by the department that the Appellant are rendering the services which are exigible to service tax and the Appellant are not paying the service tax; accordingly, the Appellant were issued two show cause notices for the different....
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..... Commissioner of CGST, Delhi West - 2024 (3) TMI 1178 CESTAT New Delhi • M/s Krishna Consultancy vs. Commissioner of CGST, Nagpur - 2023 (10) TMI 503 CESTAT Mumbai • M/s Study Overseas Global (P) Ltd. vs. CST, Delhi - 2017 (5) TMI 887 CESTAT New Delhi • M/s Valmiki Consultants Pvt. Ltd. vs. Commissioner of Customs, Central Tax, Hyderabad - 2018 (11) TMI 1085 CESTAT Hyderabad 4.4 He further submits that the service provided by the Appellant does not fall under the definition of 'Intermediaries' as envisaged under Rule 2(f) of the Place of Provision of Service Rules, 2012 because the said definition does not include a person who provides the main service on his own account and this aspect has been considered in the following judgments: • Genpact India (P) Ltd. vs. Union of India - 2023 (68) G.S.T.L. 3 (P&H) • Principal Commissioner of CGST, Delhi South vs. Comparex India Pvt. Ltd. - 2021 (47) G.S.T.L. 355 (TriDel.) affirmed by Supreme Court in as cited in 2021 (50) G.S.T.L. J9 (S.C.). • Evalueserve .Com Pvt. Ltd vs. CST, Gurgaon - 2018 (3) TMI 1430 CESTAT Chandigarh 4.5 He further submits that the le....
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.... order. 6. We have considered the submissions made by both the parties and perused of the material on record. We find that the only issue involved in the present case is whether the services provided by the Appellant fall under the ambit of 'Export of Services' and are exempted from service tax; or are classifiable under 'Intermediary Service' as defined under Rule 2(f) of the Place of Provision of Service Rules, 2012 read with Rule 9 of the Place of Provision of Service Rules, 2012. 7. First of all, we will deal with the issue whether the services provided by the Appellant are covered under the definition of 'Intermediary Service' or not? Before we give findings on the issue of 'Intermediary Service' allegedly provided by the Appellant, it will be appropriated to reproduce the definition of 'Intermediary Service' as defied under Rule 2(f) of the Place of Provision of Service Rules, 2012, which is reproduced herein below: "intermediary" means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the 'main' service) or a supply of goods, between two or more persons,....
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....tion of "intermediary" under IGST Act as well as under Service Tax law, it is evident that there is broadly no change in the scope of intermediary services in the GST regime vis-a-vis the Service Tax regime, except addition of supply of securities in the definition of intermediary in the GST Law. 3. Primary Requirements for intermediary services The concept of intermediary services, as defined above, requires some basic prerequisites, which are discussed below : 3.1 Minimum of Three Parties : By definition, an intermediary is someone who arranges or facilitates the supplies of goods or services or securities between two or more persons. It is thus a natural corollary that the arrangement requires a minimum of three parties, two of them transacting in the supply of goods or services or securities (the main supply) and one arranging or facilitating (the ancillary supply) the said main supply. An activity between only two parties can, therefore, NOT be considered as an intermediary service. An intermediary essentially "arranges or facilitates" another supply (the "main supply") between two or more other persons and, does not himself provide the main supply. ....
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....ly, to one or more sub-contractors. Such sub-contractor provides the main supply, either fully or a part thereof, and does not merely arrange or facilitate the main supply between the principal supplier and his customers, and therefore, clearly is not an intermediary. For instance, 'A' and 'B' have entered into a contract as per which 'A' needs to provide a service of, say, Annual Maintenance of tools and machinery to 'B'. 'A' sub-contracts a part or whole of it to 'C'. Accordingly, 'C' provides the service of annual maintenance to 'A' as part of such sub-contract, by providing annual maintenance of tools and machinery to the customer of 'A', i.e. to 'B' on behalf of 'A'. Though 'C' is dealing with the customer of 'A', but 'C' is providing main supply of Annual Maintenance Service to 'A' on his own account, i.e. on principal to principal basis. In this case, 'A' is providing supply of Annual Maintenance Service to 'B', whereas 'C' is supplying the same service to 'A'. Thus, supply of service by 'C' in this case will not be considered as an intermediary. 3.6 The specific provision of place of supply of 'intermediary services' under section 13 of the IGST Act shall be invoke....
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.... case, main supply of insurance claims processing service is between 'P' and 'R', while 'Q' is merely arranging or facilitating the supply of services between 'P' and 'R', and not himself providing the main supply of services. Accordingly, in this case, 'Q' acts as an intermediary as per definition of subsection (13) of section 2 of the IGST Act. Illustration 4 'A' is a manufacturer and supplier of computers based in USA and supplies its goods all over the world. As a part of this supply, 'A' is also required to provide customer care service to its customers to address their queries and complains related to the said supply of computers. 'A' decides to outsource the task of providing customer care services to a BPO firm, 'B'. 'B' provides customer care service to 'A' by interacting with the customers of 'A' and addressing / processing their queries/complains. 'B' charges 'A' for this service. 'B' is involved in supply of main service 'customer care service' to 'A', and therefore, 'B' is not an intermediary. 5. The illustrations given in para 4 above are only indicative and not exhaustive. The illustrations are also generic in nature and should not be....
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....although the principal may authorize to negotiate a different price; (d) The consideration for an intermediary is separately identifiable from the main supply of service that he is arranging and is in the nature of fee or commission charged by him; (e) The test of agency must be satisfied between the principal and the agent i.e. the intermediary. The Guidance Note states that the intermediary or the agent must have documentary evidence authorizing him to act on behalf of the provider of the main service; (f) The payment for such services is received by way of commission; (g) The Principal must know the exact value at which the service is supplied (or obtained) on his behalf. 11. From the agreement placed before us and arguments adduced before us, we find that the activity of computer networking is networking service which is an application running at the network application layer and above, that provides data storage, manipulation, presentation, communication or other capability which is often implemented using a client-server or peer-to-architecture based on application layer network protocols. 12. In view of the above, we do n....
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....and accordingly, it cannot be said that the appellant has provided intermediary service and should be governed under the provisions of Rule 9 of the rules." 12. Further, we find that the Principal Bench of the Tribunal in the case of Verizon India Pvt. Ltd. - 2021 (45) GSTL 275 (Tri. Del.) has held that: "30. We find that the said stand of Revenue is wholly mis-construed and erroneous. Firstly, no demand notice was issued on the appellant refusing or questioning the status of the export of service to Verizon US, as declared in their ST-3 Returns. Further, we find that the Hon'ble Delhi High Court has held, that its findings applied to post-Negative List also i.e. from July, 2012 onwards, as held by the Hon'ble High Court in its aforementioned judgment particularly in para-54 (supra). Further, admitted facts are that the appellants have provided output services and raised invoices on principal to principal basis. The appellant has not been acting as intermediary between another service provider and Verizon US. This fact is also supported from the fact that the appellant has raised their bills for the services provided on the basis of cost plus 11% mark-up. As the service....
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....ore persons. In fact, the appellant is providing services to their clients namely banks/colleges/university who are paying commission/fees to the appellant. The appellant is only facilitating the aspirant student and introduced them to the college and if these students gets admission to the college, the appellant gets certain commission which is in nature of promoting the business of the college and for referring investors borrow loan from foreign based bank to the people who wishes settled in Canada on that if the deal matures, the appellant is getting certain commission. So the nature of service provided by the appellant is the promotion of business of their client, in terms, he gets commission which is covered under Business Auxiliary Service which is not the main service provided by the main service providers namely banks/university. As the appellant did not arrange or facilitate main service i.e. education or loan rendered by colleges/banks. 11. In that circumstances, the appellant cannot be called as intermediary in the light of the judgment issued by the Advanced Ruling Authority in the case of Universal Services India Pvt. Ltd. reported in 2016 (42) STR 585 (AAR) a....