TaxTMI 
TaxTMI 
2025 (5) TMI 2139
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....asons stated in the grounds. (B) Issue a writ of certiorari or any other writ or direction or order to quash impugned Order-in-Original No. 104/2022-23ND3 dated 28.03.2023 bearing DIN:2023035700000000AB77 enclosed as Annexure B for the reasons stated in the grounds. (C) Writ of declaration or any other appropriate writ or direction to declare that the provisions of Section 8 of Integrated Goods and Services Tax Act, 2017, enclosed as Annexure C, as unconstitutional for the reasons stated in the grounds. (D) Writ of declaration or any other appropriate writ or direction to declare that the provisions of Section 13 (8) (b) of Integrated Goods and Services Tax Act, 2017, enclosed as Annexure D, as unconstitutional for the reasons stated in the grounds. (E) Issue a writ of certiorari or any other writ or direction or order to quash Circular. No. 159/15/2021 dated 20.09.2021 to extent of Para 3.6 as unconstitutional, enclosed as Annexure E for the reasons stated in the grounds. (F) Issue a writ of certiorari or any other writ or direction or order to quash Circular No. 135/05/2020-GST dated 31 March 2020 to extent of Para 5 as unconstitutiona....
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....stated in the grounds. (B) Issue a writ of certiorari or any other writ or direction or order to quash impugned show cause notice dated 19.12.2021 bearing SCN No. 52/2020-21(GST), enclosed as Annexure B1 issued Respondent No.3for the reasons stated in the grounds. (C) Issue a writ of certiorari or any other writ or direction or order to quash impugned show cause notice dated 12.01.2022 bearing SCN No. 53/2021-22(GST) having DIN 2022015700000000A042, enclosed as Annexure B2 Issued Respondent No.3 for the reasons stated in the grounds. (D) Issue a writ of certiorari or any other writ or direction or order to quash impugned show cause notice dated 17.01.2022 bearing SCN No. 55/2021-22(GST) and having DIN 20220157YW000000F26E, enclosed as Annexure B3 issued Respondent. No. 3 for the reasons stated in the grounds. (E) Issue a writ of certiorari or any other writ or direction or order to quash impugned show cause notice dated 21.01.2022 bearing SCN No. 56/2021-22(GST) and having DIN 20220157000000924749, enclosed as Annexure B4, issued Respondent No.3 for the reasons stated in the grounds. (F) Issue a writ of certiorari or any other writ or di....
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....of Integrated Goods and Services Tax Act, 2017, enclosed as Annexure C, as unconstitutional for the reasons stated in the grounds. (D) Writ of declaration or any other appropriate writ or direction to declare that the provisions of Section 13 (8) (b) of Integrated Goods and Services Tax Act, 2017, enclosed as Annexure D, as unconstitutional for the reasons stated in the grounds. (E) Issue a writ of certiorari or any other writ or direction or order to quash Circular. No. 159/15/2021 dated 20.09.2021 to extent of Para 3.6 as unconstitutional, enclosed as Annexure E issued by Respondent No. 2 for the reasons stated in the grounds. (F) Issue a writ of certiorari or any other writ or direction or order to quash Circular No. 135/05/2020-GST dated 31 March 2020 to extent of Para 5 as unconstitutional, enclosed as Annexure F issued by Respondent No. 2 for the reasons stated in the grounds. (G) Issue a writ of declaration or any other appropriate writ or direction to declare that the provisions of 36 (4) of Central Goods and Services Tax Rules, 2017, enclosed as Annexure G, as unconstitutional for the reasons stated in the grounds. (H) ....
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....earned counsel appearing for the petitioner as well as learned counsel appearing for the respondents-Revenue and perused the material on record. They have not argued on the validity of the provisions or the circulars and therefore, these matters will be left open for consideration in an appropriate case. 5. Before adverting to the rival contentions, it would be necessary to refer to one of the subject Agreements i.e., Buying Support Services Agreement dated 01.07.2017 entered into between the petitioner and M/s. Columbia Sportswear Company, USA; as stated earlier, several such similar / identical agreements have been entered into between the petitioner and the said company, which are the subject matter of the present petitions. The said Agreement is as under:- "BUYING SUPPORT SERVICES AGREEMENT THIS AGREEMENT, is effective as of July 1, 2017 (the Effective Date), by and between Columbia Sportswear India Sourcing Private Limited ("Provider"), a corporation organized and existing under the laws of India with its principal offices at Corniche Al-Lateef, 3rd Floor, No 25, Cunningham Road, Bangalore, 560 052, Karnataka, India, and Columbia Sportswear Company ("Recip....
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....llowing support services: * Coordinate and act as the channel of communication between the Recipient and the suppliers. * Survey the potential markets to identify the best available supplier of goods. * Advise Recipient as to accessories and fabrics suitable for manufacturing garments. * Identify potential factories for the manufacture of Products. Visit factories to assess the operation's ability to deliver quality goods in a timely manner subject to quality parameters of Recipient communicated to manufacturer. * Coordinate with suppliers to obtain production schedules, by factory, which allows Recipient to place production orders directly on manufacturers with its choice of factories and take advantage of quantity price breaks. * Coordinate with suppliers to update the Recipient's Management Information Systems based on direct despatches of manufactured products by the suppliers concerned, to the Recipient. * Provide services in relation to monitoring of the factories which are producing garments for Recipient to ensure compliance with timelines and quality standards prescribed by the Recipient. Provider shall....
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.... all claims, damages and liabilities whatsoever, asserted by any person or entity, resulting directly or indirectly from any breach of Provider or Recipient or any of their respective employees or agents, of this Agreement or of any warranty, representation, covenant or obligation contained in this Agreement. Such indemnification shall include the payment of all reasonable attorneys' fees and other costs incurred by the indemnified party in defending any such claims. The indemnified party shall inform the indemnifying party in writing of any claim, demand or suit and shall fully cooperate in the defense thereof. The indemnified party will not agree to the settlement of any such claim, demand or suit prior to the final judgment thereon without the consent of the indemnifying party, whose consent will not be unreasonably withheld. NOTICES 6.0 All notices and statements hereunder required to be given to Provider will be sent to Pill notices and states first mentioned herein, to the attention of Finance Manager and all notices to Recipient will be sent to Recipient at its address first mentioned herein, to the attention of CFO. Either party may change its....
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....s partners or as creating the relationships of employer/employee, franchisor/franchisee, or principal/agent between the parties. EXECUTION OF AGREEMENT AND CONTROLLING LAW 12.0 This Agreement shall be governed by and construed in accordance with the laws of the State of Oregon. In the event that any of the provisions of this Agreement shall be held by a court or other tribunal of competent jurisdiction to be unenforceable, such provisions shall be enforced to the maximum extent permissible and the remaining portions of this Agreement shall remain in full force. IN WITNESS WHEREOF, the parties hereto have executed this Agreement, to be effective as of the date first written above by their duly authorized officers." 6. It is seen from the Agreement that the service provider has purchasing responsibilities which would help the foreign service recipient to identify who is the best person from whom products can be brought. The work involves surveying of market to identify the best supplier of goods, identifying best factories, visiting of factories, services relating to monitoring of factories selected by the foreign recipient, ensuring timely shipment of g....
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.... recipient, petitioner filed a refund claim / application dated 27.09.2021 for refund of unutilized Input Tax Credit (ITC) under Section 54 of the Central Goods and Services Tax Act, 2017 (for short 'the CGST Act') r/w Rule 89(4) of the CGST Rules for the period October 2019 to March 2020 claiming refund in a sum of Rs. 30,83,19,614/-. In pursuance of the same, 2nd respondent issued a show cause notice dated 01.11.2021 proposing to reject the entire refund claim of the petitioner. The petitioner filed a detailed reply dated 16.11.2021 before the 2nd respondent refuting and denying the various allegations made in the show cause notice and reiterating its claim 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 Divi....
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....23-VIL-1219-CESTAT-CHE-ST affirmed in 2024 (3) TMI 1045-SC ORDER; 7. Vodafone Idea Ltd.v. Union of India - 2022 (66) G.S.T.L. 63(Bom); 8. M/s. Cube Highways and Transportation Assets Advisor Private Limited. Assistant Commissioner CGST Division & Ors., - 2023-VIL-547 DEL; 9. Boks Business Services Pvt Ltd., v. Commissioner of Central Goods and Services Tax Delhi South and Anr. - 2023-VIL-579-DEL; 10. Xilinx India Technology Services Pvt. Ltd., v. The Special Commissioner Zone VII & Anr., -2023-VIL-190- DEL; 11. 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. 9. It would also be profitable to extract the aforesaid CBIC Circular No. 159/15/2021-GST dated 20.09.2021, which is ....
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....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 services or securities; ....
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....or 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 clarified through the following ....
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....efinition 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, would depend upon the fa....
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.... 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 or facilitati....
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....r 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 ....
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....nce with Explanation 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 mea....
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....regard or, 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,-- ....
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.... is in the 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 pro....
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....ss of persons, 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, i....
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....ides 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 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 o....
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....-respondent No. 1 under Sections 73 of the Finance Act, 1994 ("Act, 1994") read with Section 174 of Central Goods & Services Tax Act, 2017 ("CGST Act") requiring the petitioner to explain why 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 th....
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....oviding necessary infrastructure in India so as to enable SingTel to facilitate seamless global telecommunication services to its customers based in Singapore and other foreign territories. 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....
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....that he is arranging. It can be based on an agreed percentage of the sale or purchase price. Generally, the amount charged by an agent from his principal is referred to as 'commission'. Identity 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 pl....
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....r the services provided to the service recipient ; there was no privity of contract between Verizon India and the customers of Verizon US ; while such customers may be "users" of the services provided by Verizon 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....
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.... our court and inter alia a passing reference was made that the view that SGIPL is a provider of "intermediary services" was not correct and there was no option but for the Revenue to await the outcome of 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 ....
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....rsons under CGST Act, and thus are separate legal entities. Accordingly, these two separate persons would not be considered as "merely establishments of a distinct person in accordance with Explanation I in section 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',....
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....which states that the supplier of main service sub-contracts the same to sub-contractors, such sub-contractors providing such main service on their own account cannot be deemed to be arranging or facilitating the main supply 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 ....
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.... and marketing; technical marketing assistance; and other related services". 19. The learned CESTAT had examined the agreement and had concluded as under (pages 201 and 202 in 124 GSTR): "30. It would, therefore, transpire 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 custom....
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....e 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 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 ....
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....'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..." 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 31....
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....that the role of a 'intermediary' is only supportive; in the instant case, the material on record clearly establishes that the petitioner cannot be said to be facilitating or arranging supply of services, since the meaning of "facilitation / arrangement" 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; f....
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....n 2 (13) of the IGST Act. "'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;" 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 ....
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....sive 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 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 carr....
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....ho 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 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 transacti....
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.... 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...." 30. It is also relevant to refer to Section 2 (6) of the IGST Act, which defines 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 pet....
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....iving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or (iii) such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette, specify." 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 ....
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....ediary" as defined under sub-section (13) of Section 2 of the IGST Act is a person who facilitates supply of services - he does not supply services himself but merely arranges the same. The Central Board of Indirect Taxes and Customs had issued a Circular dated 20-9-2021 which 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-S....
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.... facilitates' in the definition of 'intermediary' suggests a subsidiary role for the intermediary. It must arrange or facilitate some other supply, which is the main supply, and does not himself provides the main supply. Thus, the role of intermediary is only supportive. 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 in....
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....a person acting on his behalf) with the supplier of the services. There is no allegation that the petitioner has rendered any service to an individual. Plainly, the adjudicating authority has misunderstood the nature of services covered under sub-section (3)(b) of Section 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 t....
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....rayed that this Court be pleased to remand the matter for re-adjudication in the light of the decision of this Court in Ernst & Young Ltd. v. Commr. (CGST) [Ernst & Young Ltd. v. Commr. (CGST), (2023) 113 GSTR 252 : 2023 SCC OnLine Del 1764] by calling for additional documents/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....
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....kkeeping, Payroll, and accounts, through the use of cloud techno logy for our UK/Europian based clients. 2. That the Indian company shall devote whole time for the work assigned by the foreign company and shall maintain all work-related ethics. It is expected that work 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 inteimediaiy, 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,....
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....er and the overseas entity. (xiii) A perusal of the agreements entered into between the petitioner and the overseas entity will indicate that services provided by the petitioner cannot be construed or treated as intermediary services as is evident from the relevant covenants/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....
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....PONSIBILITIES OF THE PARTIES 1.5.1. Recipient shall be responsible for conceptualising and determining the characteristics/ functionalities of the software/software module to be developed by the Provider. 1.5.2. Recipient shall provide the software module specifications, 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/te....
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....rse of any work under this Agreement including all intellectual property rights therein shall rest in and remain Recipient's property and Recipient is entitled to take possession of them, at any time. 1.7.2. Recipient shall be entitled to take possession 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....
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....eport in accordance with the Recipient's instructions and practice. In addition, when requested by Recipient, Provider shall provide any such additional information, in the form separately agreed, of the costs incurred and the allocation of the costs together with supporting 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 ....
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....w: 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 two principals. This ancillary supply is supply of intermediary service and is clearly identifiable and distinguished from the main supply. A per....
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.... 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.' (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 ow....
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....ces is not available on such supply of data hosting services. 2.2 Thus, clarification has been sought in respect of the following issues- (i) Whether data hosting service provider qualifies as 'Intermediary' between the cloud computing service provider and their end customers/users/subscribers as per Section 2 (13) of the Integrated Goods and Services Tax Act, 2017 (herein after referred to as the "IGST Act") and whether the services provided by data hosting service provider to cloud computing service providers are covered as intermediary services and whether the place of supply of the same is to be determined as per section 13 (8) (b) of IGST Act. (ii) Whether the data hosting services are provided in relation to goods "made available" by recipient of services to service provider for supply of such services and whether the place of supply of the same is to be determined as per section 13 (3) (a) of the IGST Act. (iii) Whether the data hosting services are provided directly in relation to "immovable property" and whether the place of supply of the same is to be determined as per section 13 (4) of the IGST Act. 3. Clarification 3....
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....vices seamlessly over the internet through technology hosted on data centers. There appears to be no contact between data hosting service provider and the end users/ consumers/ subscribers of the overseas cloud computing service provider. Thus, it is observed that the data hosting service provider provides data hosting services to the cloud computing service provider on principal-to-principal basis on his own account and is not acting as a broker or agent for facilitating supply of service between cloud computing service providers and their end users/consumers. 3.1.4 Accordingly, it is clarified that in such a scenario, the services provided by data hosting service provider to its overseas cloud computing service providers cannot be considered as intermediary services and hence, the place of supply of the same cannot be determined as per section 13 (8) (b) of IGST Act. Circular No. 230/24/2024-GST F. No. CBIC-20001/6/2024-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing *** New Delhi, dated the 10th September, 2024 ....
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....oods and Services Tax Act, 2017 (herein after referred to as the "IGST Act"), thereby resulting in determination of place of supply under section 13 (8) (b) of the IGST Act? b. Whether the representative of foreign client in India or the target audience of the advertisement in India can be considered as the recipient of the services being supplied by the advertising company under section 2(93) of CGST Act? c. Whether the advertising services provided by the advertising companies to foreign clients can be considered as performance-based services as per section 13(3) of the IGST Act? 3. CLARIFICATION: 3.1 Issue 1 -Whether the advertising company can be considered as an "intermediary" between the foreign client and the media owners as per section 2 (13) of IGST Act? 3.1.1 As per section 2 (13) of IGST Act, read with Circular no. 159/15/2021-GST dated 20.09.2021, a broker, agent or any other person who arranges or facilitates the main supply of goods or services or both or securities and has not involved himself in the main supply on his own account is considered as intermediary. 3.1.2 In the instant scenario, it is observed that th....
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....ip agreements came up for detailed consideration, wherein the Supreme Court while holding that the said agreement was one of distributorship and not agency, held as under: "8. Agency is therefore a triangular relationship between the principal, agent and the third party. In order to understand this relationship, one has to examine the inter se relationship between the principal and the third party and the agent and the third party. When we examine whether a legal relationship of a principal and agent exists, the following factors/aspects should be taken into consideration: (a) The essential characteristic of an agent is the legal power vested with the agent to alter his principal's legal relationship with a third party and the principal's co-relative liability to have his relations altered. (b) As the agent acts on behalf of the principal, one of the prime elements of the relationship is the exercise of a degree of control by the principal over the conduct of the activities of the agent. This degree of control is less than the control exercised by the master on the servant, and is different from the rights and obligations in case of principal to p....
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....nder more complete control than is a non-servant''. The difference is "in the degree of control rather than in the acts performed. The servant sells primarily his services measured by time; the agent his ability to produce results." This distinction can be criticised, for servants may have very wide discretion, and may not really be subject to control at all in practice, while agents may have their power to act circumscribed by detailed instructions. 11. This Court in Bhopal Sugar Industries Ltd. v. Sales Tax Officer [1977] 3 SCC 147. has expounded the difference between principal-agent and principal-principal relationship, in the following words:- "5. ... the essence of the matter is that in a contract of sale, title to the property passes on to the buyer on delivery of the goods for a price paid or promised. Once this happens the buyer becomes the owner of the property and the seller has no vestige of title left in the property. The concept of a sale has, however, undergone a revolutionary change, having regard to the complexities of the modern times and the expanding needs of the society, which has made a departure from the doctrine of laissez faire by ....
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....n.com 201/210 Taxman 269/348 ITR 378/[2014] 16 SCC 114. which is a case relating to Section 194-H of the Act. This Court had approved the decision of the High Court in Ahmedabad Stamp Vendors Association v. Union of India [2002]124 Taxman 628/257 ITR 202 (Guj.) We may also refer to two more decisions of this Court. In the case of Director, Prasar Bharati v. CIT [2018] 92 taxmann.com 11/255 Taxman 1/403 ITR 161/7 SCC 800 this Court has observed that the explanation appended to Section 194-H of the Act defining the expression 'commission or brokerage' is an inclusive definition giving wide meaning to the expression 'commission'. The second decision is in the case of Singapore Airlines Ltd. v. CIT [2022] 144 taxmann.com 221/[2023] 290 Taxman 139/449 ITR 203/[2023] 1 SCC 497 which we shall refer to subsequently in some detail as to its exact purport and ratio. However, at this stage, we would like to examine in some detail commercial relationships in the nature of an independent contractor, that are legally, principal to principal dealings. 14. The passage from Bhopal Sugar Industries Limited (supra) highlights the principles and the complexities involved in de....
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....from a wholesale supplier or a manufacturer for subsequent resale to retail customers or suppliers who, in turn, deals with retail dealers or shopkeepers. Such 'middlemen' are sometimes referred to as 'agents', when in fact they are franchisees of the manufacturer or supplier, or are distributors of the manufactures' goods, perhaps with a 'sole agency' or special dealership for his goods. Such 'agents' can be real buyers, acting as principals on their own behalf. Consequently, they are not liable to the manufacturer or supplier in the way an agent might be for failure of duty, nor do their contracts with other parties - whether it be suppliers, retail dealers or individual customers - hold the party who sold to them, liable, for any breach including misrepresentation or sale of defective goods. The seller's contractual or tortious liability is different from the manufacturer's liability on account of warranty/guarantee, statutory liability or even obligation to a third party who purchases the goods or avails services from/through the independent contractor. An agent renders service to the principal, who he/she represents, and therefore th....
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....ho is of the age of majority according to the law to which he is subject, and who is of sound mind, may employ an agent. 184. Who may be an agent.- As between the principal and third person any person may become an agent, but no person who is not of the age of majority and of sound mind can become an agent, so as to be responsible to his principal according to the provisions in that behalf herein contained. 185. Consideration not necessary.- No consideration is necessary to create an agency. 186. Agent's authority may be expressed or implied.- The authority of an agent may be expressed or implied. 187. Definitions of express and implied authority.- An authority is said to be express when it is given by words spoken or written. An authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, may be accounted circumstances of the case. 188. Extent of agent's authority.- An agent, having an authority to do an act, has authority to do every lawful thing which is necessary in order to do such act. An agent having an authority to carry on ....
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....ct the principal's legal position by acts which, though performed by the agent, are to be treated in certain respects as if they were acts of the principal. It is common to regard control by the principal as a defining characteristic of agency. Thus, agency is termed as acting on behalf of the principal and subject to principal's control. 15.3 An agency has to be distinguished from other relationships such as an agent and trustee; agent and bailee; agent and employee; agent and independent contractor; agent and seller; agent and buyer; agent and borrower; agent and person supplying services. 15.4 Suppliers of the goods of a manufacturer, whether on a retail or wholesale basis, who have some form of concession as a regular stockist, distributor or franchisee, are often described as agent, selling agent, main agent, etc. for the manufacturer of goods which they supply. However, nowadays the distributor actually buys from the manufacturer and resells it to his own customers. In such cases, the term 'agent' is used in a complimentary sense only, i.e., not to transact any business on behalf of the principal, except as regards purchase of the goods from the principal. S....
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....y, and would be consistent only with sale or return. 11. A conspectus of the above discussion would indicate that the legal position regarding what would constitute intermediary services vis-a-vis a principal to principal relationship can be summarised as under: * In terms of Section 2 (13) of the IGST Act, 2017, the definition of what is an intermediary would show that it would mean a broker or agent or any other person and the name by what he is called is not important or relevant; what is important/relevant is the function he provides and that would be arranging or facilitating the supply of goods or services or both or of securities; such facilitation or arrangement should be between two or more persons; further, he should not make this supply on his own account; * In terms of the above, it is clear that if a person acts as an intermediary, apart from him, at least two persons should be involved and the intermediary would facilitate supply between two or more of them. Therefore, there should be, (i) a minimum of three parties (ii) two distinct supplies, where principal will supply the goods or services to a third party as one supply and su....
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....person does data hosting services for a foreign company and the foreign company uses this to store third party data, the person providing such services is doing it without any contact with the third party and therefore, cannot be called an intermediary as he does not facilitate or arrange. He is only doing the said services on his own account to the foreign company who could store any data on that platform. * Therefore, even if there are three parties, one should clearly see whether the agreement casts an obligation on the service provider to act on someone else's behalf in respect of such supply and only then it would be an intermediary services. For example, where one party to a contract with another party, sub contracts a portion of his work to a third party, it does not mean that an intermediary relationship is established. Sub contractors would very well be doing the said work on their own account as is often the case with software development or research work carried out in India on contract basis. * It is also axiomatic that absence of three persons would straightaway rule out the agreement from the scope of intermediary services as the agreement would ....
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....n its own account to the service receiver located outside India and it does not enable supply between the foreign recipient and the third parties; (iii) The acts of the petitioner are that of an independent contractor and it does not represent or bind the foreign client in the course of executing its services. (iv) The foreign recipient, therefore, remunerates the petitioner by way of a service fee for the services rendered which is on a cost plus mark up basis and not based on percentage of success, etc. which is common in agency agreements. (v) The foreign recipient is free to chose from whom he would procure and the petitioner's recommendations are not final and binding on it and the petitioner cannot also represent that it is doing something on behalf of the foreign recipient. (vi) The host of services rendered by the petitioner is more akin to business support services to enable efficient procurement of garments and a continuing business relationship rather than enabling procurement of orders on a commission basis. 13. In view of the aforesaid facts and circumstances, I am of the view that the impugned orders and demands made by the respo....
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....ection (10) of section 73 of the said Act for issuance of order under sub-section (9) of section 73 of the said Act, for recovery of erroneous refund; (iii) excludes the period from the 1st day of March, 2020 to the 28th day of February, 2022 for computation of period of limitation for filing refund application under section 54 or section 55 of the said Act. 2. This notification shall be deemed to have come into force with effect from the 1st day of March, 2020. [F. No. CBIC-20001/2/2022-GST] (Rajeev Ranjan) Under Secretary 15. In the light of the aforesaid Notification, the details and particulars as to how the refund claim of the petitioner in W.P. No. 3420/2023 and W.P. No. 3376/2023 is not barred by limitation is indicated below: "W.P. No. 3420/2023 W.P. No. 3376/2023 Chart showing that the refund application filed by the petitioner are not barred by limitation W.P. No. 3420/2023 Month for which refund is preferred Date of realization of Foreign Exchange 1^st Refund application Revised refund application Due date for filing refund application as per Section 54 (2) years from the date of realization Whether ....
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....ofar as they relate to rejection of the refund claim of the petitioner pertaining to the issue of 'intermediary / intermediary services' are hereby quashed by holding that the services provided by the petitioner do not fall under the definition of 'intermediary services' and that the same is considered as export of services. (iii) The impugned orders insofar as they relate to rejection of the refund claim of the petitioner on the ground that they are barred by limitation under Section 54 of the CGST Act are hereby set aside by holding that the refund claims of the petitioner are not barred by limitation in the light of the CBIC Notification bearing No. 13/2022-Central Tax dated 05.07.2022 which is applicable to the refund claim of the petitioner; (iv) The respondents are directed to grant/pay refund in favour of the petitioner together with interest under Section 56 of the CGST Act, 2017 as expeditiously as possible and at any rate within a period of three months from the date of receipt of a copy of this order. (v) All other contentions and issues including rejection of all other refund claims of the petitioner are kept open to be adjudicated by the appropriate authoritie....