TaxTMI 
TaxTMI 
2025 (4) TMI 8
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....at the differential value was an account of sale of goods and export of services. However, the same was rejected by the original authority on the ground that the export services were, in fact, intermediary services and hence, service tax was liable to be paid. He also confirms service tax for the services rendered to Special Economic Zone (SEZ) unit for having failed to file documents/declarations claiming the exemption. On appeal, the Commissioner (Appeals) set aside the demand on the services rendered to SEZ unit but confirmed the demand on intermediary services only for the normal period on the ground that the appellant had accepted that they are providing the intermediary services. 2. The Learned Counsel for the appellant submitted that they had contested that the service was not an intermediary service on the ground that there was no agreement to consider the activity as intermediary services. It is also submitted that the commission was paid only for facilitating sale of goods between the foreign seller and Indian buyer. Further, it is contested that the appellant has only passed on the prospective customers information to its USA and Korean entities, based on which the pr....
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....024(10) TMI 147 - CESTAT NEW DELHI]. The relevant portion of the order reads as follows: - "15. The relevant clauses of the Cost Reimbursement Agreement do not indicate that Grant Thornton, India was to act as an 'intermediary'. The activities undertaken by Grant Thornton, India are for promoting the brand name of Grant Thornton in India. Grant Thornton in India had to provides services on its own account and merely because Grant Thornton, India outsourced certain services would not mean that it became an 'intermediary'. 16. The transaction would, therefore, not be covered by rule 9 of the 2012 Rules. Under rule 3 of the 2012 Rules, which would be applicable in the present case, the place of provision of service shall be the location of the recipient of service. The recipient of service is Grant Thornton, London, which is outside India. There is no dispute that the payment for the services had been received by Grant Thornton, India in convertible foreign currency. Thus, the conditions set out in rule 6A of the Service Tax Rules 1994 stand satisfied. Thus, there can be no manner of doubt that the services provided by Grant Thornton, India to Grant Thornton, London ....
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....sfied for a person to qualify as an "intermediary"; - 29. First, the relationship between the parties must be that of a principal-agency relationship. Second, the person must be involved in arrangement or facilitation of provisions of the service provided to the principal by a 3rd party. Third, the person must not actually perform the main service intended to be received by the service recipient itself. Scope of an "intermediary" is to mediate between two parties i.e. the principal service provider (the 3rd party) and the beneficiary (the agents principal) who receives the main service and expressly excludes any person who provides such main service "on his own account". 30. A bare perusal of the recitals and relevant clauses of the MSA reproduced hereinabove do not in any manner indicate that petitioner is acting as an "intermediary" so as to fall within the scope and ambit of the definition of "intermediary" under Section 2(13) of the IGST Act. Such clauses cannot also be interpreted to conclude that the petitioner has facilitated the services. The said clauses are in relation to the modalities of how the actual work would be carried out and do not in any manner....
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....hat the petitioner is providing intermediary services. As discussed above, the Services rendered by the petitioner are not as an intermediary and therefore, the place of supply of the Services rendered by the petitioner to overseas entities is required to be determined on basis of the location of the recipient of the Services. Since the recipient of the Services is outside India, the professional services rendered by the petitioner would fall within the scope of definition of 'export of services' as defined under Section 2(6) of the IGST Act. 34. There is no dispute that the recipient of Services- that is EY Entities - are located outside India. Thus, indisputably, the Services provided by the petitioner would fall within the scope of the definition of the term 'export of service' under Section 2(6) of the IGST Act." 20. This issue was also examined by the Tribunal in M/s Medway Educational Consultant P. Ltd. vs. Commissioner, CGST Commissionerate, Delhi-West [2024 (3) TMI 1178 - CESTAT New Delhi] and it was observed: "13. Coming to "export of service" post 1st July, 2012, the basic principle to be seen is who is the recipient of the service, whether the ....
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....t has provided the service on his own account to the recipient of service, i.e. the foreign university placed beyond the taxable territory of India. Referring to Rule 6 of Rules, 2012, the learned Counsel submitted that they were providing services relating to specific event, i.e. recruitment of students for admission in educational institution/universities, i.e. recipients located outside India and therefore the place of provision of service shall be the place where the event is actually held. On the other hand, "intermediary services" are broader category and is not applicable to specific category. We find force in the submission of the learned counsel." 21. In Verizon Communication India Private Limited the Delhi High Court had observed:-the services in convertible foreign exchange and the appellant and the recipient of service are independent legal identities and are not merely "51. In the considered view of the Court, the judgment of the CESTAT in Paul Merchants Ltd. v. CCE, Chandigarh (supra) is right in holding that "The service recipient is the person on whose instructions/orders the service is provided who is obliged to make the payment from the same and ....