TaxTMI 
TaxTMI 
2025 (5) TMI 150
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....ST Act and that such service qualifies as 'export of service' under Section 2 (6) of the IGST Act; c) Hold that the Petitioner is not an intermediary' in terms of Section 2 (13) of the IGST Act and does not meet the requirements of an intermediary that are laid down in the CBIC Circular dated 20.09.2021; d) Sanction refund of Rs. 1,09,42,824/- being the accumulated ITC relating to the export of customer support services to Foreign Affiliate-during the period October 2019 to March 2020 along with applicable interest vide Annexure-A. e) Sanction refund of Rs. 2,52,29,456/- by including the credit availed the Petitioner on input services under HSN Code 9954 i.e., Construction services, during the period October 2019 to March 2020 in the 'N-for calculating the maximum refund to the Petitioner along applicable interest vide ANNEXURE-K. f) pass such further order(s) and other reliefs as the circumstances of the case may require. g) Issue a writ in the nature of certiorari or any other writ or order or direction under Article 226 of the Constitution of India quashing the show cause notice No. 08/2022 dated 01.09.2022 issued by r....
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....im for refund. By order at Annexure-K dated 25.11.2021, the 2nd respondent partially allowed the claim of the petitioner and sanctioned refund of Rs. 28,30,90,158/- and rejected the refund claim to an extent of Rs. 2,52,29,456/-. 2.3 Aggrieved by the aforesaid order dated 25.11.2021, petitioner filed an appeal in GST.A. No. 108/2022-23 before 1st respondent - appellate authority to the extent of rejection of its refund claim in a sum of Rs. 2,52,29,456/-.; so also, the Department / Revenue (Deputy Commissioner - ND4 Division) also filed an appeal in GST.A. No. 116/2022-23 challenging the aforesaid order to the extent of allowing the refund claim of the petitioner in a sum of Rs. 1,09,42,824/-. In addition thereto, the 2nd respondent also issued a show cause notice dated 01.09.2022 to the petitioner proposing to recover the aforesaid alleged erroneous refund of Rs. 1,09,42,824/- from the petitioner, to which the petitioner submitted replies / letters etc., 2.4 By the impugned order at Annexure-A dated 04.01.2024, the 1st respondent - appellate authority dismissed the appeal filed by the petitioner and partially allowed the appeal of the Department to the extent of sanctioning ....
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....M/s.Ernst and Young Limited vs. Additional Commissioner, CGST, Appeals-II, Delhi and Anr- 2023-VIL-190-DEL; 12. Ohmi Industries Asia Pvt. Ltd., v. Asst. Commissioner of GST - 2023-VIL-224-DEL; 13. Commissioner of GST, Gurgaon II vs. Orange Business Solutions Pvt.Ltd., - 2019 (27) G.S.T.L. 523 (Tri-Chan.) 14. Evalueserve.com Pvt. Ltd. Vs. CST, Gurgaon - 2019(365) E.L.T. 546 (Tri- Chan); 15. Macquarie Global Services Pvt. Ltd v. CCE & ST, Gurgaon, 2021-TIOL-790-CESTAT-CHD. 5. Per contra, learned counsel for the respondents - Revenue would reiterate the various contentions urged in the statement of objections and submits that there is no merit in the petition and that the same is liable to be dismissed. 6. I have given my anxious consideration to the rival submissions and perused the material on record. 7. Before proceeding further, it is relevant to state that the present petition is restricted to rejection of the refund claim of the petitioner pertaining to the issue of "intermediary" in that, the respondents have rejected the refund claim in relation to customer support services provided by the petitioner by holding that the petitioner w....
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....and Recipient are collectively referred to as the "Parties", and each individually is a "Party." RECITALS A. Recipient wishes to engage Provider to perform the services listed in Exhibit B (the "Services") pursuant to the terms of this Agreement; and B. Provider desires to perform the Services pursuant to the terms of this Agreement. AGREEMENT NOW, THEREFORE, in consideration of the mutual promises contained In this Agreement, and for other good and valuable consideration, the adequacy and sufficiency of which are hereby acknowledged, Recipient and Provider agree as follows: 1. Services. Provider and Recipient agree that Provider shall provide (or cause to be provided) Services to Recipient pursuant to this Agreement as from time to time requested by Recipient orally or in writing; provided, however, that Provider reserves the right to decline to render, or cause to be rendered, any Services where Provider, in its sole judgment, does not have adequate facilities, personnel or resources to perform or cause to be performed the Services, or where providing the Services would violate Provider's policies or applicable law. Recipi....
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....ntellectual property and proprietary rights (including but not limited to rights in databases, software, marketing strategies and marketing surveys); (ii) any application or right to apply for any of the rights referred to in this clause; and (iii) any and all modifications, enhancements, replacements, renewals, extensions, future equivalents and restorations thereof, now or hereinafter in force and effect; and (b) any and assigned from any third party or 2.2 Derivative Works. "Derivative Works" shall include any and all new or enhanced Intellectual Property and works created in or from the process of use of the existing Intellectual Property by Provider in providing services per this Agreement. 3. Pricing and Payment. 3.1. Accounting Principles. All aspects of preparation, presentation, and reporting in regards to this Agreement shall be conducted pursuant to accounting principles set forth on Exhibit C. 3.2. Service Fees. In consideration of Provider's performance of the Services, Recipient shall pay to Provider the fees set forth on Exhibit C attached hereto together with any Taxes Invoiced to Recipient in accord....
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....the Recipient. 3.5. Audit. Provider will keep copies of all books and records relating to the Services during the term of this Agreement and for the later of (1) the expiration of the statute of limitations for any tax return filed by the parties to this agreement that would be impacted by adjustments to the Service Fees or (ii) three years thereafter. Recipient may upon reasonable notice and during normal business hours examine and make copies of all books and records relating to the Services. 3.6. Arm's Length Price. It is the intent of the parties that the price paid by Recipient for the Services hereunder equal the price that an unrelated third party would have charged for the Services purchased by Recipient (such amount hereinafter referred to as an "Arm's Length Price"). In the event that any taxing jurisdiction finally determines that the aggregate amount paid to Provider hereunder is not equal to an Arm's Length Price, Recipient shall pay to Provider, as additional compensation hereunder, an amount equal to the difference between the amount actually paid by Recipient and the amount finally determined by such taxing jurisdiction to be an Arm'....
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....nses in the name of or binding on any other Party, or offer of create any warranty or other obligation, express or implied, on behalf of any other Party. Any services performed by a Party pursuant to this Agreement are performed by such Party, as an independent contractor on a non-exclusive basis, and nothing in this Agreement creates a partnership, joint venture franchise of agency relationship between the Parties as a result of this Agreement Provider has exclusive control over its employees, representatives. agents, contractors and subcontractors (collectively, "Personnel"), and over its employee relations and its policies relating to wages, hours, working conditions and other employment conditions Provider has the exclusive right to hire transfer, suspend, dismiss, recall. with its Personnel. Provider is responsible for all salaries and other compensation of its Personnel who provide Services and for making all deductions and withholdings from its employees' salaries and other compensation and paying all contributions, taxes and assessments. Provider's Personnel are not eligible to participate in any employment benefit plans or other benefits available to Recipient'....
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....The initial term and any renewal term shall be referred as "Term". 6.2. Termination without cause. Either Recipient or Provider may terminate this Agreement upon 30 days written notice given to the other Party. This Agreement will automatically terminate in the event that either Party ceases to be an Affiliate. 6.3. Termination for Breach. Either Party may terminate the Agreement, effective upon written notice to the other Party, If: 6.3.1 the other Party materially breaches any of the material provisions of this any Agreement and fails to cure the same within thirty (30) days after receipt of written notice from the other Party; or 6.3.2. the other Party is unable to pay its debts when due, makes any assignment for the benefit of creditors, files any petition under the bankruptcy or insolvency laws, has a receiver or trustee to be appointed for its business or property, or is adjudicated bankrupt or insolvent, and fails to rectify the same within thirty (30) days after receipt of written notice from the other Party. 6.4. Effect of Termination. Any termination shall be without prejudice to any other right or remedy afforded to either Par....
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.... hereto shall be reinstated and this Agreement shall continue in full force and effect. The Party affected by any Event of Force Majeure shall give prompt written notice thereof to the other Party hereto and each Party shall use good faith efforts to minimize the duration and consequences of, and to eliminate any such Event of Force Majeure An Event of Force Majeura" means unforeseen control, including without limitation, God, war, not, embargoes, fire, flood, or earthquake, which circumstances prevent that Party from fulfilling its obligations under this Agreement. 7.6 Headings. The headings of the sections of this Agreement have been set forth for use of reference only and shall not be used to construe or interpret the terms and conditions of this Agreement. 7.7 Execution of Agreement: Counterparts: Electronic Signatures. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Instrument. The exchange of coples of this Agreement and of signature pages by facsimile transmission (whether directly from one facsimile device to another by means of a dial-up connection or whet....
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....te tax authority; provided however, that Recipient will deliver a receipt for any such taxes withheld and any other documents as may be necessary to enable Provider to claim a foreign tax credit or deduction for the taxes withheld. Payment to Provider as reduced by such withholdings will constitute full payment and settlement to Provider of such amounts. Provider will be responsible for all other taxes (including interest and penalties) or fees arising from transactions and the documentation of transactions under this Agreement. EXHIBIT A INTELLECTUAL PROPERTY RIGHTS Recipient shall provide to Provider the right to access and/or use any Intellectual Property that Recipient has rights to use that are required in order for the Provider to perform the designated Services listed on Exhibit B or agreed upon by both Parties from time to time per the terms of this Agreement. Recipient retains all rights and any Derivative Works if any may evolve in the course of Provider having access to or using any Intellectual Property in its course of the Provider meeting or carrying out its obligations under this Agreement as a Service Provider. EXHI....
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.... (Other Costs]+ [Costs] + [Costs x Costs Percentage(s)] 6. Currency. Unless otherwise agreed to by the parties, the Service Fees will be invoiced and paid in EUR Euro. 7. Invoices. Payment shall be due and payable NET 90 days after the date of the invoice. 8. True-Up Payment. To the extent that a True-Up Payment is required, payment of non-contested amounts is due and payable 90 days after the end of the month in which the invoice containing the True-Up amount is issued. 9. Accounting Principles. United States Generally Accepted Accounting Principles shall apply. 10. Advance Payments. As agreed upon from time to time by Parties, Recipient may make advance payments to the Provider for services to be rendered by the Provider to Recipient under this Agreement. To the extent the advance payment differs from the Service Fees actually accrued during a given month, the excess advance payment will be credited against the next invoice for Service Fees, while any shortfall shall be added to the next invoice for Service Fees. Any excess advance payment will be repaid by the Provider to Recipient if this Agreement expires or is terminated. ....
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....or applicable law. Recipient shall provide Provider with sufficient information and assistance as reasonably requested by Provider to enable Provider to provide the Services or cause the Services to be provided. Provider shall provide the Services or cause the Services to be provided in accordance with any reasonable services standards and guidelines provided by Recipient from time to time with a reasonable time period to implement as may be appropriate. Provider may outsource any or all of the Services to be provided pursuant to this Agreement as well as any other obligations under this Agreement to third parties or Affiliates (as defined below) without the consent of Recipient: provided, however, that such third party or Affiliate must perform the Services in the same manner and to the same standards otherwise agreed to by Provider. "Affiliate" means any business entity that is directly or indirectly controlled by, or under common control with Amazon.com, Inc. For this purpose, control will mean beneficial ownership of 50% or more of the outstanding equity Interests in a business entity. 2. Related Services. Provider agrees to provide Recipient with such other services a....
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....ion of the contested fee(s) by Provider and the Recipient. The Parties agree that a good faith estimate of the Service Fees may be invoiced during the calendar year pursuant to this Agreement and, as such, this Section 3.4 shall apply to adjust such estimates in accordance herewith. The final calculation of Service Fees for any calendar year, including without limitation adjustments to the Service Fees as a result of an audit performed under this Section 3.4, may occur after the end of the calendar year and, if so, any adjustments to the estimate will attach in the subsequent calendar year. To the extent that Service Fees include payments estimated by Recipient, no adjustments are required to be made in the event that the actual Service Fees provided are less than those estimated by the Recipient. 3.5 Audit. Provider will keep copies of all books and records relating to the Services during the term of this Agreement and for the later of (i) the expiration of the statute of limitations for any tax return filed by the parties to this agreement that would be impacted by adjustments to the Service Fees or (ii) three years thereafter, Recipient may upon reasonable notice and du....
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....s, rules and regulations. In particular, Recipient will ensure that it uses appropriate technical and organizational measures to protect Personal Data. "Personal Data" means any data that either on its own or in combination with other available data allows identification of a natural person, (e.g., a human customer or a contact within a corporate customer). Personal Data includes interest-based profiles of Recipient's or any Affiliate's customers for so long as these profiles have not been anonymized. 5. Status and Liabilities of the Parties. 5.1 Relationship Between Parties. Unless otherwise set forth in Exhibit A, Exhibit B, or Exhibit C as otherwise authorized in writing, no Party has any authority of any kind to enter into agreements or licenses in the name of or binding on any other Party, or offer or create any warranty or other obligation, express or implied, on behalf of any other Party. Any services performed by a Party pursuant to this Agreement are performed by such Party as an independent contractor on a non-exclusive basis, and nothing in this Agreement creates a partnership, joint venture, franchise or agency relationship between the Parties ....
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....S, AND MATERIALS. THERE IS NO WARRANTY OF TITLE OR NONINFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OR ANY WARRANTY AGAINST INTERFERENCE WITH ANY PARTY'S OR ANY OTHER ENTITY'S ENJOYMENT OF INFORMATION PROVIDED TO IT RELATING TO THIS AGREEMENT. 5.4 Compliance. Each Party shall comply with all applicable laws, rules and regulations relating to the subject matter of this Agreement. 6. Term. 6.1 Term. The initial term of this Agreement shall commence on the Effective Date and subject to earlier termination as provided herein, continue through the following March 31. The term of this Agreement shall automatically renew every April 1 following the expiration of the initial term for a renewal term that shall expire each following March 31. The initial term and any renewal term shall be referred to as the "Term". 6.2 Termination without cause. Either Recipient or Provider may terminate this Agreement upon 30 days written notice given to the other Party. This Agreement will automatically terminate in the event that either Party ceases to be an Affiliate. 6.3 Termination for Breach. Either Party may terminate the Agreement, effective up....
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....igned by authorized agents of both Parties, except as otherwise provided in Section 7.4 of this Agreement. 7.4 Binding Effect; Assignment. This Agreement inures to the benefit of and is binding upon the Parties and their respective successors and assigns. Any Party may assign its rights and obligations under this Agreement without the other Parties' consent provided the assignee is an Affiliate of the assignor. 7.5 Force Majeure. This Agreement shall not be terminated as a result of any failure of a Party to perform any of its obligations hereunder if such failure is due to an Event of Force Majeure (as defined below), provided, that at such time as an Event of Force Majeure no longer exists, the respective obligations of the Parties hereto shall be reinstated and this Agreement shall continue in full force and effect. The Party affected by any Event of Force Majeure shall give prompt written notice thereof to the other Party hereto and each Party shall use good faith efforts to minimize the duration and consequences of, and to eliminate any such Event of Force Majeure. An "Event of Force Majeure" means unforeseen circumstances beyond a Party's reasonable ....
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....tions contemplated under this Agreement ("Transaction Taxes") that Provider is legally obligated to charge under the applicable legislation. Provider should raise a valid invoice under the applicable law(s) and regulations within prescribed time limit. Provider may charge and Recipient will pay applicable Transaction Taxes that Provider is legally obligated to charge and pass to authorities, provided that such Transaction Taxes are stated separately on the valid invoice that Provider provides to Recipient. Recipient may provide Provider an exemption certificate acceptable to the relevant taxing authority, in which case, Provider shall not collect the Transaction Taxes covered by such certificate. If any taxes are legally required to be withheld on payments made by Recipient to Provider, Recipient shall maintain the right to withhold such taxes and pay them to the appropriate tax authority, provided however, that Recipient will deliver a receipt for any such taxes withheld and any other documents necessary to enable Provider to claim a tax credit for the taxes withheld. Payment to Provider as reduced by such withholdings will constitute full payment and settlement to Provid....
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....by the Recipient. 2. Intellectual Property 2.1. Use by Provider. Provider shall be entitled to use such Intellectual Property of the Recipient as the Recipient makes available to Provider, for the purpose and to the extent that is only necessary for the provision of Services. Nothing in this Agreement shall be construed as transferring to Provider any rights in Intellectual Property of Recipient. To the extent such use applies to Trademarks, trade names, trade dress, "look and feel" and service marks, (a) Provider's use of such Trademarks, trade names, trade dress, "look and feel" and service marks are subject to Provider's compliance with any trademark usage guidelines that Recipient may provide to Provider from time to time during the term of this Agreement, and (b) Provider acknowledges and agrees that as between the parties all goodwill arising from the use of such Trademarks, trade names. trade dress, "look and feel" and service marks inure solely to the Recipient's benefit. 2.2. Ownership by Recipient. The parties agree that the results and proceeds of Provider's Services under this Agreement have been specially ordered or commission....
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....sting, financial analysis and planning, treasury activities including cash management, local accounting and payroll assistance; 1.4. Tax Services, including but not limited to, assistance with tax planning, policy, advisory and compliance (both direct and indirect taxation matters) advice with tax risk management, assistance in structuring tax reporting and accounting processes, and other related tax matters as mutually agreed by the parties; 1.5. Legal Services, including but not limited to, assistance with legal planning and negotiation of commercial transactions involving corporate law and other relevant jurisdiction legal issues, legal review of commercial documents, contracts, real property and employment related issues, advice regarding legal corporate compliance matters, keeping and updating corporate records, and other legal matters as mutually agreed to by the parties. 1.6. Any other services the Parties may agree to from time to time. 2. Compliance. Provider shall comply with all applicable laws, rules and regulations in providing the Services, including without limitation, Section 4 of this Agreement and any other export and privacy la....
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....his Agreement. To the extent the advance payment differs from the Fees actually accrued during a given month, the excess advance payment will be credited against the next invoice for Service Fees, while any shortfall shall be added to the next invoice for Service Fees. Any excess advance payment (net of withholding taxes) will be repaid by the Provider to Recipient if this Agreement expires or is terminated. 11. Manner of Payment., Recipient may pay Service Fees hereunder by way of cash or by book entry offset against other amounts due and payable. Payment of Service Fees in cash shall be made in the Currency set forth herein, directly to Provider or to such bank as is designed by Provider. 12. Amazon Security Policy. Provider will comply in all respects with Amazon's Security Policy. Recipient may change the Security Policy, from time to time, at its sole discretion. Recipient, or retained third party, may audit and verify Provider's compliance with this Agreement. Such audit shall be conducted on prior written notice at the expense of Recipient and will be performed during Provider's normal business hours. 9. It would also be profitable to extract....
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....f 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 pre-requisites, 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 ser....
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.... 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' subcontracts 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 clarif....
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....s an intermediary as per definition of sub-section (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 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....
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....tions. 'A' out sources the task of design and development of a particular module of the software to 'C', for which "C' may have to interact with 'B', to know their specific requirements. In this case, 'C' is providing main supply of service of design and development of software to 'A', and thus, 'C' is not an intermediary in this case. illustration 3 An insurance company 'P', located outside India, requires to process insurance claims of its clients in respect of the insurance service being provided by 'P' to the clients. For processing insurance claims, 'P' decides to outsource this work to some other firm. For this purpose, he approaches 'Q', located in India, for arranging insurance claims processing service from other service providers in India. 'Q' contacts 'R', who is in business of providing such insurance claims processing service, and arranges supply of insurance claims processing service by 'R' to 'P'. 'Q' charges P a commission or service charge of 1% of the contract value of insurance claims processing service provided by 'R' to 'P'. In such a case, main supply of insurance claims processing service is between 'P' and 'R', while 'Q' is merely arranging....
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....ther be fulfilled nor satisfied and the customer support services provided by the petitioner clearly do not constitute intermediary services and consequently, the said contention of the respondents - revenue cannot be accepted. 14. In the case of Genpact India's (1) case supra, the Hon'ble Division Bench of the Punjab and Haryana High Court held as under: 3. The petitioner is registered with Haryana GST Authorities and is involved in providing a host of services collectively referred as BPO Services to customers located in India as well as outside India. An illustrative list of services stated to be rendered by the petitioner is as under : (i) Maintaining vendor/customer master data, scanning and processing vendor invoices, book-keeping, preparing/finalizing books of account, generating ledger reconciliations, managing customer receivables, etc. (ii) Developing, licensing and maintaining software as per clients' needs. (iii) Technical IT support, i. e., trouble-shooting services. (iv) Data analysis and providing solutions to clients in respect of forecasting of demand for their offerings and management of inventory, supporting var....
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....lanation 1 in section 8 ;.. .. S. 13. Place of supply of services where location of supplier or location of recipient is outside India.-(1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India. (2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services : Provided that where the location of the recipient of services is not available 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 pla....
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....in the absence of such contract or agreement, on such other basis as may be prescribed. (8) The place of supply of the following services shall be the location of the supplier of services, namely :-- (a) services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders ; (b) intermediary services ; (c) services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month. Explanation.-For the purposes of this sub-section, 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 fin....
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.... taxable territory. (13) In order to prevent double taxation or non-taxation of the supply of a service, or for the uniform application of rules, the Government shall have the power to notify any description of services or circumstances in which the place of supply shall be the place of effective use and enjoyment of a service.. .. . S. 16. Zero-rated supply.-(1) 'zero rated supply' means any of the following supplies of goods or services or both, namely:-- (a) export of goods or services or both ; or (b) supply of goods or services or both for authorised operations] to a special economic zone developer or a special economic zone unit. (2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. (3) A registered person making zero rated supply shall be eligible to claim refund of unutilised input-tax credit on supply of goods or services or both, without payment of integrated tax, under bond or letter of undertaking, in accordance with the provisions of ....
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...., as notified under section 55, entitled to a refund of tax paid by it on inward supplies of goods or services or both, may make an application for such refund, in such form and manner as may be prescribed, before the expiry of [two years] from the last day of the quarter in which such supply was received. (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input-tax credit at the end of any tax period : Provided that no refund of unutilised input tax credit shall be allowed in cases other than- (i) zero rated supplies made without payment of tax ; (ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the council : Provided further that no refund of unutilised input-tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty : Provided also that no refund of input-tax credit shall be allowed, if the supplie....
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....s) to perform certain of these business process outsourcing and information technology services on behalf of GI for the GI customers, as may be appropriate, from time to time ; Whereas, provider shall have the opportunity to accept or reject any such proposed appointment by GI in its sole discretion, subject to the terms of this agreement ; Whereas, each provider agrees that, in the event it shall have agreed to accept any such appointment by GI, to perform its obligations in a manner and at a level that satisfies in all respects GI's obligations to the relevant GI customers, as set forth in the agreements and statements of work (each, a "Customer Statement of Work") entered into from time to time between GI and the GI Customers (collectively, the "GI Customer Agreements"). Whereas the provider acknowledges that upon such acceptance to perform services for GI, customer statement of work terms on performance standards, indemnities, liabilities and other operating terms, excepting pricing under each customer statement of work will be applicable by reference to all services to be performed by the provider under this agreement. Whereas, GI will h....
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....contact for the providers in dealing with the respective GI customer under this agreement, (b) have overall responsibility for managing and co-ordinating the receipt of the services for such GI customer, (c) interact regularly with the provider account representative (as hereinafter defined) and (d) have the authority to make decisions with respect to actions to be taken by GI in the ordinary course of day-to-day management of GI's receipt of the services. 3.3. .. 3.4 Customer invoicing and collection. GI shall be responsible for processing all invoices rendered to GI customers, in the form required by each GI customer, as set forth in the relevant customer agreement, and for handling all disputes with GI customers. Notwithstanding the foregoing, it shall be the responsibility of each Provider to furnish GI with all financial data and other support as may be necessary in order for GI to render invoices to GI customers with respect to services provided by the provider. Article 4 Personal data processing 4.1 Personal data. In performance of this agreement, each provider may have access to, or otherwise process, GI customer personal data on a GI....
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....e provider's performance (the "Service Levels"). For project based customer statement of work all the deliverables and the milestones or any other such measurement shall be used to measure the provider's progress with respect to completion of the applicable services. 7.2 and 7.3. .. 7.4 Measurement and monitoring tools. Provider shall implement its measurement and monitoring tools and procedures to measure and monitor its performance against the service levels in any given customer statement of work. Upon GI's reasonable request, provider shall provide GI with information and access to such measurement and monitoring tools and procedures for purposes of verification. Article 10 fees and payment terms 10.1 Service charges (a) The charges for services provided to GI by a provider during a particular calendar year with respect to each GI customer (the "Provider Service Fee") shall be invoiced to and paid for by GI to the provider at an amount equal to the excess of (i) over the sum of (ii), (iii) and (iv) below : (i) the amount invoiced to the GI customer for such services (as denominated in US Dollars), in accordance w....
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....itioner 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 establish that the petitioner was required to arrange/facilitate a third party to render the main service which has actually been rendered by the petitioner. 37. A perusal of the definition of "intermediary" under the service tax regime vis-a-vis the GST regime would show that the definition has remained similar. Even as per circular dated September 20, 2021 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs (GST Policy Wing), the scope of "intermediary" services has been dealt in para 2 thereof. In para 2.2 it stands clarified that the concept of "intermediary" was borrowed in GST from the service tax regime. The circular after making a reference to the definition of "intermediary" both under rule 2 (f) of the Place of Provision of ....
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....the extended period of limitation in terms of proviso to Section 73(1) of the Finance Act, 1994 should not be invoked for recovery of refund of Rs. 2,64,92,41,846/- granted to the petitioner. 4. The impugned notice further requires the petitioner to explain why service tax of Rs. 16,73,74,91,090/- should not be demanded and recovered from the petitioner. 5. On 30-7-2021, when notice of motion was issued, reference was made to CWP-6048-2021 titled as Genpact India (P) Ltd. v. Union of India, (2022) 1 Centax 226 (P & H) : (2023) 68 GSTL 3 (P & H) : (2022) 144 tax-mann.com 201/(2023) 95 GST 46 (Punj. & Har.), decided on 11-11-2022 in which notice had already been issued and was pending for consideration. In that writ petition, the petitioner had challenged order dated 15-2-2021 whereby refund claim of un-utilized Input Tax Credit (ITC) used in making zero rated supplies of services under GST regime had been rejected. The main ground of the petitioner in that writ petition was that refunds had been granted to the petitioner consistently for all financial years starting from 2005-2006 under the service tax regime and, therefore, on the principle of consistency, refunds....
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.... 5. The plea of the appellant in each of the matters as also canvassed before this court, has been that SGIPL merely procures services from other service providers in India viz., Airtel, Vodafone, Tata, Reliance, etc., and supplies the same to Singtel without any alteration ; and that SGIPL does not provide the aforesaid services of telecommunications "on their own account" and thus fall within the definition of "intermediary services" on a conjoint reading of rule 6A (1) (d) of the Service Tax Rules* read with rule 9 (C) of the POPS Rules. 6. Per contra, SGIPL contends that the place of provision of services would be considered as per the location of the recipient of services by virtue of rule 3 of the ST Rules, which is outside India, and that it is not an "intermediary". 7. In a nutshell, the learned Customs, Excise and Service Tax Appellate Tribunal vide the impugned common order dated December 7, 2022 interpreted the terms and conditions of the agreement dated July 14, 2011 executed between SGIPL and SingTel and in light of relevant statutory rules as well as the decision of this court in the case of Verizon Communications India Ltd. v. Assistant Commissioner....
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....entity and title : The service provided by the intermediary on behalf of the principal are clearly identifiable. In accordance with the above guiding principles, services provided by the following persons will qualify as 'intermediary services' : (i) Travel agent (any mode of travel) (ii) Tour operator (iii) Stockbroker (iv) Commission agent [an agent for buying or selling of goods is excluded (v) Recovery agent Even in other cases, wherever a provider of any service acts as an agent for another person, as identified by the guiding principles outlined above, this rule will apply." 18. On a careful perusal of the terms and conditions of the aforesaid agreement dated July 14, 2011 between SingTel and SGIPL, we find no legal infirmity or irrational approach adopted by the learned Customs, Excise and Service Tax Appellate Tribunal when it comes to conclude that SGIPL is not providing "intermediary services". The plea that SGIPL is not providing any services on its own account is misplaced. It is manifest that there is no contract between SingTel and service providers in India like Airtel, Vodafone, Reliance etc., an....
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....erizon India but were not its recipients ; even though Verizon India may have been using the services of a local telecom operator but that would not mean that the services to Verizon US were being rendered in India ; and the place of provision of such service to Verizon US remains outside India. It is pertinent to mention that a reference was made to the decision of the apex court in the case of All India Federation of Tax Practitioners v. Union of India [2007] 293 ITR 406 (SC) ; (2007) 7 STR 625 (SC), wherein the nature of service tax was explained and it was observed that (page 411 in 293 ITR) : "6. At this stage, we may refer to the concept of 'Value Added Tax' (VAT), which is a general tax that applies, in principle, to all commercial activities involving production of goods and provision of services. VAT is a consumption tax as it is borne by the consumer. 7. In the light of what is stated above, it is clear that service tax is a VAT which in turn is destination based consumption tax in the sense that it is on commercial activities and is not a charge on the business but on the consumer and it would, logically, be leviable only on services provided wi....
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....the appeals preferred by them before the learned Customs, Excise and Service Tax Appellate Tribunal. It was simultaneously observed that by that time even the learned Customs, Excise and Service Tax Appellate Tribunal had also dismissed the appeals, presumably vide the impugned order dated December 7, 2022. 17. The Delhi High Court has taken an identical view in Xilinx India's case supra, as under:- 2. The petitioner is a company incorporated under the Companies Act, 2013. It has its registered office in Hyderabad, Telangana and branch office in New Delhi. The petitioner is a subsidiary of Xilinx Inc., USA, a company registered in the United States of America. The petitioner is an Export Oriented Unit (hereafter 'EOU') registered with the Software Technology Parks of India (hereafter 'STPI') and is primarily engaged in exporting information technology software services to entities located overseas. 3. The petitioner entered into an Inter company Service Agreement (hereafter 'the Agreement') dated 10.06.2016 with its holding company (Xilinx USA) for export of information technology services. In terms of the Agreement, it was agreed that the petitioner would be r....
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....ion 8". 5.2. Therefore, supply of services by a subsidiary/sister concern/group concern, etc. of a foreign company, which is incorporated in India under the Companies Act, 2013 (and thus qualifies as a 'company' in India as per Companies Act), to the establishments of the said foreign company located outside India (incorporated outside India), would not be barred by the condition (v) of the sub-section (6) of the section 2 of the IGST Act, 2017 for being considered as export of services, as it would not be treated as supply between merely establishments of distinct persons under Explanation I of section 8 of IGST Act 20 I7. Similarly, the supply from a company incorporated in India to its related establishments outside India, which are incorporated under the laws outside India, would not be treated as supply to merely establishments of distinct person under Explanation 1 of section 8 of IGST Act, 2017. Such supplies, therefore, would quality as 'export of services', subject to fulfilment of other conditions as provided under sub-section (6) of section 2 of IGST Act." 11. It is clear from the above that the impugned order has been passed without application of mind....
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....y between the supplier and customers, as a result of which, such sub-contractors would not qualify as an 'intermediary'; in the instant case, the main supply of customer support services to be provided by the foreign affiliates is entirely sub-contracted to the petitioner who provides customer support services and accordingly, there is only one main supply which is being supplied and the necessary ingredients of two existence of two distinct supplies is neither satisfied nor fulfilled; as stated supra, that apart from the fact that there is no privity of contract between the petitioner and Amazon consumer entities / selling partners, operating and selling goods to end customers of the Amazon consumer entities, there is also no privity of contract between the petitioner and end customers and as such, the contentions urged on behalf of the respondents cannot be accepted on this ground also. 20. In Black Berry India's case supra, the Hon'ble Division Bench of the Delhi High Court held as under:- 12. The principal controversy required to be addressed by the learned CESTAT was whether Blackberry India is an intermediary within the definition of rule 2 (f) of the Place of Pro....
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....ire from the agreement that: (i) The appellant is engaged in providing marketing, administrative and support service to Blackberry Singapore, as an independent contractor; (ii) The appellant is not an agent or broker of Blackberry Singapore. There is no relationship of principal and agent between Blackberry Singapore and the appellant. The arrangement between the appellant and Blackberry Singapore is on a principal-to-principal basis. Further, the appellant does not have any authority to represent or bind Blackberry Singapore, which further supports the fact that the appellant is not an agent of Blackberry Singapore and, therefore, is not an intermediary; (iii) The appellant is not engaged in facilitating any supply between Blackberry Singapore and its customers. The agreement is only between the appellant and Blackberry Singapore wherein the appellant is providing the aforesaid services to Blackberry Singapore. The customers of Blackberry Singapore are not a part of the contract and the appellant at no point in time is involved in providing any service to the customers of Blackberry Singapore. The appellant does not even have any knowledge about the fina....
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....nges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account.' 2.2. The concept of 'intermediary' was borrowed in GST from the Service Tax Regime. The definition of 'intermediary' in the Service Tax law as given in rule 2 (f) of the Place of Provision of Services Rules, 2012 issued vide Notification No. 28/2012-S.T., dated June 20, 2012 was as follows: '"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.' 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 b....
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....r both, or securities, between two or more persons, which are arranged or facilitated by the intermediary. It implies that in cases wherein the person supplies the main supply, either fully or partly, on principal to principal basis, the said supply cannot be covered under the scope of intermediary..." 24. It is clear from the aforesaid circular that Blackberry India cannot be considered as an intermediary in the context of the services rendered by it under the agreement. 25. This court had also considered a similar question albeit in the context of refund of input-tax credit under the Integrated Goods and Services Tax Act, 2017 in Ernst and Young Limited v. Additional Commissioner, CGST Appeals-II, Delhi : W.P. (C) No. 8600 of 2022, decided on March 23, 2023 [(2023) 113 GSTR 252 (Delhi).] and Ohmi Industries Asia Private Ltd. v. Assistant Commissioner, CGST : W.P. (C) No. 6838 of 2022, decided on March 29, 2023 [(2023) 116 GSTR 319 (Delhi).]. In our view, the said decisions are squarely covering the controversy sought to be raised by the Revenue in this appeal. 26. The conclusion of the adjudicating authority that the services covered under section 65 (0....
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....t" cannot be extended to cover the subject agreements, where the petitioner himself undertook to perform / execute the main service, particularly when the "main service" allegedly being facilitated separately / independently by the petitioner has not been identified by the respondents whose contention cannot be accepted on this ground also. 23. As stated supra, the petitioner is engaged in addressing the queries of customers of Amazon consumer entities / selling partners on their own account, which falls outside the scope and ambit of intermediary services as explained in illustration No.4 to the aforesaid Circular; in the case on hand, the material on record clearly indicates that the petitioner does not engage in marketing products or procuring orders for sale and is in fact, expressly / explicitly barred from entering into or negotiating any contracts for sale of produces or services in terms of the aforesaid agreements; further, the petitioner neither identifies customers for foreign affiliates / marketplace entities / selling partners nor does the petitioner perform any activity which results in arranging or enabling the supply of goods or services between these entities an....
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.... who supplies such goods or services or both or securities on his own account;" 20. A plain reading of the aforesaid definition makes it amply clear that an intermediary merely "arranges or facilitates" supply of goods or services or both between two or more persons. Thus, it is obvious that a person who supplies the goods or services is not an intermediary. The services provided by the intermediary only relate to arranging or facilitating the supply of goods or services from the supplier. In the present case, there is no dispute that the petitioner does not arrange or facilitate services to EY entities from third parties; it renders services to them. The petitioner had not arranged the said supply from any third party. 21. It is important to note that the adjudicating authority had also accepted that the petitioner has provided the services. As noted hereinbefore, the adjudicating authority had returned a categorical finding that "the party provides services on behalf of E&Y Ltd., UK in India to its (E & Y Ltd., UK) overseas client". The adjudicating authority had reasoned that since the petitioner provides services on behalf of E&Y Limited (the petitioner's ....
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....ervice provider provides services to the recipient on his own account as opposed to merely putting the third party directly in touch with the service recipient and arranging for the supply of goods or services. 24. Thus, even if it is accepted that the petitioner has rendered services on behalf of a third party, the same would not result in the petitioner falling within the definition of "intermediary" under Section 2 (13) of the IGST Act as it is the actual supplier of the professional services and has not arranged or facilitated the supply from any third party. 25. The assumption that the petitioner has acted as a buying and selling agent, is without any basis. The adjudicating authority had referred to the letter dated 4-4-2008 issued by RBI permitting E&Y Limited to open a branch office in India (that is establishing the petitioner) and further clarifying the activities that a branch office could carry on. The same included export-import of goods; rendering professional or consultancy services, carrying out research work in which the parent company is engaged, promoting technical or financial collaboration between Indian companies and parent or overseas group ....
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....f Provision of Services Rules, 2012 issued vide Notification No. 28 of 2012-S.T., dated 20-6-2012 was as follows: '"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.' 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 ....
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.... the expression "export of services". Section 2 (6) of the IGST Act is set out below: "'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); and (v) the supplier of service and the recipient of service are not merely establishment of a distinct person in accordance with Explanation 1 in Section 8;" 31. Section 13 of the IGST Act contains provisions for determining the place of services where the location of supplier or location of the recipient is outside India. Thus, the question whether the supply of service by the petitioner is outside India is required to be determined with reference to Section 13 of the IGST Act. 32. In terms of Section 13 (2) of the IGST Act, the place of supply of services except the services specified in sub-sections (3) to (13) is the location ....
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....overnment and by notification in the Official Gazette, specify." 33. In terms of sub-section (8) of Section 13 of the IGST Act, the place of supply of certain services would be the location of the supplier of the services. In terms of clause (b) of sub-section (8) of Section 13 of the IGST Act, the place of supply of intermediary services is the location of the supplier of services. In the present case, the place of supply of services has been held to be in India on the basis that 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 th....
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....ich clearly defines the scope of "intermediary services". The relevant extracts of the said circular are set out below: "2. Scope of intermediary services 2.1. 'Intermediary' has been defined in the sub-section (13) of Section 2 of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as 'IGST' Act) as under- 'Intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account.' 2.2. The concept of 'intermediary' was borrowed in GST from the service tax regime. The definition of 'intermediary' in the service tax law as given in Rule 2 (f) of the place of provision of Service Rules, 2012 issued vide Notification No. 28 of 2012-ST, dated 20-6-2012 was as follows: '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, b....
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.... 3.4. Does not include a person who supplies such goods or services or both or securities on his own account: The definition of intermediary services specifically mentions that intermediary 'does not include a person who supplies such goods or services or both or securities on his own account'. Use of word 'such' in the definition with reference to supply of goods or services refers to the main supply of goods or services or both, or securities, between two or more persons, which are arranged or facilitated by the intermediary. It implies that in cases wherein the person supplies the main supply, either fully or partly, on principal to principal basis, the said supply cannot be covered under the scope of intermediary." 42. It is, thus implicit in the concept of an "intermediary" that there are three parties, namely, the supplier of principal service; the recipient of the principal service and an intermediary facilitating or arranging the said supply. Where a party renders advisory or consultancy services on its own account and does not merely arrange it from another supplier or facilitate such supply, there are only two entities, namely, service provider and the serv....
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.... 13 of the IGST Act. These are essentially in the nature of personal services which require the physical presence of the service recipient. A publication issued by the Central Board of Excise & Customs captioned "Taxation of Services: An Education Guide" explains the significance of the words "physical presence of an individual", whether represented either as the service receiver or a person acting on behalf of the receiver, as under: "This implies that while a service in this category is capable of being rendered only in the presence of an individual, it will not matter if, in terms of the contractual arrangement between the provider and the receiver (formal or informal, written or oral), the service is actually rendered by the provider to a person other than the receiver, who is acting on behalf of the receiver. Illustration A modeling agency contracts with a beauty parlour for beauty treatment of say, 20 models. Here again is a situation where the modeling agency is the receiver of the service, but the service is rendered to the models, who are receiving the beauty treatment service on behalf of the modeling agency. Hence, notwithstanding that the mode....
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....ments/information if any, required." 57. However, we are unable to accept that the present petitions are required to be remanded to the adjudicating authority for consideration afresh. There is no material which would even remotely suggest that the services rendered by the petitioner are not as claimed, that is, advisory services relating to investments in India. As noticed above, the authorities concerned had also accepted the same as is apparent from some of the observations made in the impugned order. Neither the adjudicating authority nor the appellate authority had any material to doubt the petitioner's claim that it had rendered advisory services for making investments in India. We do not consider it apposite to remand the present petitions for fresh adjudication. The decisions in BSNL v. Union of India [BSNL v. Union of India, (2023) 4 HCC (Del) 394 : (2023) 115 GSTR 47] and in GAP International Sourcing (India) (P) Ltd. v. Commr. (CGST) [GAP International Sourcing (India) (P) Ltd. v. Commr. (CGST), (2023) 117 GSTR 107 : 2023 SCC OnLine Del 8443] relied upon by the Revenue in support of the aforesaid prayer are inapplicable in the facts of the present case. In B....
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.... will be accomplished efficiently and intelligently. XXXX XXXX XXXX 5. That the foreign company shall pay a monthly fee for the services rendered by the Indian company as follows:- a. GBP 3250/- (Fixed) to be paid every month till the period of engagement. b. GBP 500/- per Workstation engaged by the Indian company for completion the work assigned. c. The above fees is subject to review and change with mutual consent from time to time." 10. It is clear from the aforesaid terms, that the petitioner is not an intermediary, inasmuch, as the petitioner is neither facilitating the provision of services by a third entity nor acting as a middleman for procuring such services for its affiliate. The petitioner is, in fact, contracted to provide the services, and is the principal service provider in the context of the services provided by it - book keeping, payrolls, and accounts through the use of cloud technology. 11. In case of intermediary services, there are three entities - one providing the principal service, one receiving the principal service, and an intermediary who acts as an agent or a broker for facilitating or arrang....
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....clauses of the Agreement, which reads as under- BACKGROUND WHEREAS, Recipient is the operational headquarter of Networks business within Nokia Group as well as the business principal, responsible for developing, improving, maintaining. protecting and funding of portfolio of the intellectual assets related to Networks Network business; WHEREAS, Provider is the wholly owned subsidiary of Nokia Solutions and Networks BV. Netherlands and engaged in Networks business in India. Provider is also providing software development support services (hereinafter referred to as the "Services") to the Recipient from the Technology Centre located in Bangalore, Karnataka (India) and is willing to provide the Services to Recipient on continuous basis pursuant to the terms of this Agreement; WHEREAS, Provider has recently entered into a unilateral Advanced Pricing Agreement ("APA") with the Central Board of Direct Taxes, India ("CBDT") on March 28, 2016 and has agreed on the arm's length price of the Services provided to Recipient. The terms and conditions of the APA are binding on the Provider and are effective from April 1, 2009 through March 31, 2018 in respe....
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....ecifications, project/ product specifications for the software to be developed/ tested by the Provider. On a need basis, the Provider will provide its inputs in the requirement analysis phase of the software development process. Recipient shall be fully responsible for the specifications and the requirements of the software to be developed/tested by the Provider. Services performed by the Provider will be based on the statement/ schedule of work issued by Recipient. 1.5.3. Provider shall undertake the coding and documentation function with respect to the software modules that it will develop. Coding shall primarily consist of writing and documenting the software module being developed. 1.5.4. Provider shall be fully responsible for the project management activities and fully control and supervise the entire process in relation to the end deliverable of the software module(s) being developed/tested by it and shall provide regular update to the Recipient for it to analyse the progress of the project against the project plan. Recipient shall not have any rights to access the facilities of the Provider, unless specifically authorised by the Provider. 1.5.5. P....
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....n of the materials referred to in Clause 1.5. It is expressly understood that the Provider shall use such documents, drawings, models or any other materials only for the purpose of providing the Services under this Agreement and for no other purpose whatsoever and that such materials are subject to confidentiality as set out in Clause 12. 1.7.3. No license to the Provider under any trademark, patent, copyright or any other intellectual property right is either granted or implied by the conveying of any documents, drawings, models or any other materials in whatever form to the Provider (in respect of any rights of Recipient) save for the purpose of carrying out the Services under this Agreement. 2. CONSIDERATION, INVOICING AND PAYMENT TERMS 2.1. CONSIDERATION 2.1.1. In consideration for the performance of the Services by the Provider under this Agreement, the Recipient shall pay service fee ("Service Fee") to the Provider as follows, unless otherwise agreed in writing by the Parties. 2.1.2. Service Fee shall be calculated as the Costs incurred by the Provider in the provision of the Services plus a Service Mark-up as defined below. The to....
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....ting materials to the Recipient, as may be required by the Recipient. 2.2.2. For all of the Services under this Agreement, Provider shall prepare a detailed action plan and cost and investments plan in accordance with the Nokia Group's planning process. Such plan shall be subject to approval within the Provider's legal entity and regional management for the purposes of corporate authorization on behalf of the Provider. The approval and adoption of Recipient's relevant R&D management group and relevant operational units short term plans shall constitute approval of the R&D action plan on behalf of Recipient, as well as a purchase order for the Services under this Agreement. Any activities added or materially changed during the year shall be approved by corresponding bodies in accordance with applicable procedures of Nokia Group prior to implementation of any changes. 2.2.3. Provider will raise monthly invoice of the Service Fee on the Recipient as per Consideration methodology defined under clause 2.1 above. The invoice will be raised in Euros on the Recipient before the end of every month following the relevant month in which Services has been provided....
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...., 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 two principals. This ancillary supply is supply of intermediary service and is clearly identifiable and distinguished from the main supply. A person involved in supply of main supply on principal to principal basis to another person cannot be considered as supplier of intermediary service. 3.3 Intermediary service provider to have the character of an agent, broker or any other similar person: The definition o....
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....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.' (x) As can be seen from the aforesaid Circular, the scope and requirements of intermediary services are; (i) minimum of three parties (ii) Two distinct supplies (iii) character of an agent, broker or any other similar person (iv) does not include persons who supplies goods and services or both on his own account. (xi) In the instant case, none of the aforesaid criteria / requirement is fulfilled by the petitioner who provides services to its overseas entity on its own account and consequently, the services provided by the petitioner clearly cannot be construed or....
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....n 2 (13) of the IGST Act as controlling the definition of the term. We are unable to agree with this interpretation. The limb of Section 2 (13) of the IGST Act reads as "but does not include a person who supplies such goods or services or both or securities on his own account" but this does not control the definition of the term 'intermediary'; it merely restricts the main definition. The opening lines of Section 2 (13) of the IGST Act expressly provides that an intermediary means a broker, agent or any other person who "arranges or facilitates supply of goods or services or both or securities between two or more persons". The last line of the definition merely clarifies that the definition is not to be read in an expansive manner and would not include a person who supplies goods, services or securities on his own account. There may be services, which may entail outsourcing some constituent part to a third party. But that would not be construed as intermediary services, if the service provider provides services to the recipient on his own account as opposed to merely putting the third party directly in touch with the service recipient and arranging for the supply of goods o....
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....t case, the petitioner is rendering the market research services directly to OHMI, Japan. Therefore, insofar as providing market research services is concerned, the petitioner cannot be held to be an intermediary. (xv) So also, in Xilinx India Technology Services (P) Ltd. v. Commr.,- 2023 SCC OnLine Del 5628, the Delhi High Court held as under:- 9. The petitioner is a separate entity and it is settled law that identity of an incorporated company is separate from that of its shareholders. This fundamental proposition was reiterated by the Constitution Bench of the Supreme Court in Bacha F. Guzdar v. Commissioner of Income-Tax, AIR 1955 SC 74. 10. The services rendered by a subsidiary of a foreign company to its holding are not covered under Section 2 (6)(v) of the IGST Act and the same is beyond any pale of controversy in view of the Circular dated 20.09.2022 issued by the CBIC. The said circular, in unambiguous terms, clarifies as under: "5.1. In view of the above, it is clarified that a company incorporated in India and a body corporate incorporated by or under the laws of a country outside India, which is also referred to as foreign company und....
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....ry' in Boks Business Services (P) Ltd. v. Commr. (CGST) - 2023 SCC OnLine Del 5312, held as under:- 10. It is clear from the aforesaid terms, that the petitioner is not an intermediary, inasmuch, as the petitioner is neither facilitating the provision of services by a third entity nor acting as a middleman for procuring such services for its affiliate. The petitioner is, in fact, contracted to provide the services, and is the principal service provider in the context of the services provided by it - book keeping, payrolls, and accounts through the use of cloud technology. 11. In case of intermediary services, there are three entities - one providing the principal service, one receiving the principal service, and an intermediary who acts as an agent or a broker for facilitating or arranging such services for the service recipient.' 14. The aforesaid facts and circumstances and the principles enunciated in the aforesaid judgments clearly establish that respondents 2 and 5 committed an error in setting aside the refund sanction order passed by respondent No.3 and rejecting the refund claim of the petitioner by passing the impugned orders and SCNs which are i....