TaxTMI 
TaxTMI 
2024 (9) TMI 409
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....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 periods as stated in the above table. The Appellant filed detail....
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.... 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 learned Commissioner (Appeals) has not followed the decision of this Tribunal even after noting the fact that the same issue in the Appellant's own case has already been....
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.... 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, but does not include a person who provides the main service or supplies the goods on his account. 8. Further, we find that CBIC Circular No. 159/15/2021 dated 20.09.2021 explains the concept of Intermediary Services as be....
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.... 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. 3.2 Two distinct supplies : As discussed above, there are two distinct supplies in case of provision of intermediary services; (1) Main supply, between the two principals, which can be a supply of goods or services or securities; (2) Ancillary supply, which is the service of facilitating or arranging the main supply between the tw....
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....ce 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 invoked only when either the location of supplier of intermediary services or location of the recipient of intermediary services is outside India. 4. Applying the abovementioned guiding principles, the issue of intermediary services is clarified through the following illustrations : Illustration 1 'A' is a manufacturer and supplier of a machine. 'C' helps 'A' in selling the machine by identi....
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....s 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 interpreted to mean that the service categories mentioned therein are inherently either intermediary services or otherwise. Whether or not, a specific service would fall under intermediary services within the meaning of sub-section (13) of section 2 of the IGST Act, would depend upon the facts of the specific case. While examining the facts of the case and the terms of contract, the basic characteristics of intermediary services, as discussed in para 3 above, should be ke....
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....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 not find any arrangement or facilitation of the main service between two parties by a third person under the category of computer networking services. 13. We further find that the mandate from the group involves various companies more than two. So it is delivered to third entity on the direction of one M/s. Equant Network Services International Limited (ENSIL) and they act as intermediary. The appellant are 'processing equipment supply order's including liaison/coordination', so the liaison/coordination is also equivalent to solicitation and is more near to intermediary nature tha....
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....s 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 services have been provided by the appellant under contract with Verizon US, who are located outside India and have raised their invoices, for such services and have received the remittance in convertible foreign exchange, the appellant satisfies all the conditions, as specified under Rule 6A of Service Tax Rules, 1994, inserted w.e.f. 1-7-2012." 13. Further, we find that in the Appellant's own case for the same impugned services for the earlier period this Tribunal vide Final Order dated 16.03.2018 has allowed the appeal of the Appellant and has held that the services rendered/provided by the Appellant do not fall ....
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....lient, 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) and Godaddy India Web Services Pvt. Ltd. reported in 2016 (46) STR 806 (AAR) wherein it has been observed as under: "10. The definition of "intermediary" as envisaged under Rule 2(f) of POS does not include a person who provides the main service on his own account. In the present case, applicant is providing main service, i.e. "business Support Service" to WWD US and on his account. Therefore, applicant is not an "intermediary" and the service provided by him is not intermediary service. Further, during arguments, applicant drew our attention to one of the illustration given under paragraph 5.9.6 of the Education Guide, 2012 issued by C.B.E. & C. Relevant is extract....