TaxTMI 
TaxTMI 
2025 (6) TMI 88
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....g software development services. The petitioner which was earlier known as 'SWC INDIA INVESTCO LLP' entered into Master Service Agreement vide Annexure-H dated 01.04.2019 with 'THE ATHENE GROUP LLC, a limited liability company having its office in USA and it is an overseas entity and recipient of the services supplied by the petitioner which amounts to export of services, on account of which, the petitioner was not liable to pay service tax / GST on the said supply of services. 2.1 The petitioner filed a refund claim of IGST for April, 2022 and May, 2022 in a sum of Rs.76,16,997/- under Section 54 of the CGST Act, which was allowed by the 3rd respondent vide Order-in- Original dated 28.07.2022 passed in favour of the petitioner. Aggrieved by the said Order-in-Original, the Revenue filed an appeal before the appellate authority which proceeded to pass the impugned order dated 01.09.2023 allowing the appeal and thereby, rejecting the refund claim of the petitioner, who is before this Court by way of the present petition. 3. Heard learned counsel appearing for the petitioner and learned counsel appearing for the respondents-Revenue and perused the material on record. 4. Before adve....
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....es to its Clients, customers, including Athene's affiliates, or any other entity it may deem appropriate. 1.2. It is the intent of the Parties that the Agreement shall function as the master agreement under which individual SOWs shall be mutually agreed and executed between the Parties in writing. 1.3. Each SOW shall be considered integral part of the Agreement. However, in the event of any conflict between the terms of the Agreement and a SOW, the relevant SOW shall prevail over this Agreement. 2. Payment Terms 2.1. In consideration of the provisioning of the Services by Service Provider under each SOW, Athene shall pay an amount equal to (a) Service Provider's total cost, that is, cost and expenses relating to the provisioning of the applicable services under such SOW, including, without limitation, salaries of employees, compensation to third party providers, office rent and expenses, travel costs and administrative expenses, depreciation and amortization which are attributable to the Services under such SOW (collectively "Actual Costs") PLUS (b) a mark-up which shall be equal to such percentage of the Actual Costs which shall be mutually agreed between the Parti....
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....ate at the time of invoice will be shown as a separate line item on the face of invoice. Invoices delivered by Service Provider shall be in accordance with the applicable provisions of Indian Goods and Services Tax statutes. 2.6. Where Athene is required by law to deduct withholding Tax or Tax deducted at source ("WHT") from a payment to Service Provider, Athene will pay such WHT to the applicable tax authority, remit the balance amount after the deduction of the WHT to Service Provider and forward to Service Provider on a timely manner an official WHT certificate. 3. Term and Termination 3.1 The Parties agree that this Agreement and the rights and obligations of the Parties under this Agreement shall become effective from the date here of ("Effective Date") and shall be valid until the expiry of the date that is 10 (ten) years from the Effective Date ("Initial Term") and in the event the Agreement is not terminated prior to expiry of the Initial Term, the term of the Agreement shall be automatically renewed for another term of 10 (ten) years and so on until the agreement is terminated in accordance with clause herein below pursuant to this Agreement ("Term"). 3.2 In the co....
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....proceedings or Athene is ordered to be wound up by court. 3.5 The provisions relating to payment terms (Clause 2), intellectual property ownership (Clause 4), confidential information (Clause 5), non-compete (Clause 7), limitation of liability and indemnification (Clause 9) and arbitration and governing law (Clause 13) shall survive termination or expiration of this Agreement. 4. Intellectual Property Ownership 4.1 Service Provider acknowledges and agrees that all work or materials developed or provided by Service Provider for or on behalf of Athene under this Agreement, or in connection therewith (collectively, the "Works"), are exclusively owned by Athene. 4.2 Service Provider further acknowledges and agrees that, to the fullest extent allowed by law, all of the Works are "works made for hire", as that phrase is defined in the Copyright Revision Act of 1976 (17 U.S.C. § 101). Athene shall therefore be deemed to be the sole author and owner of any and all right, title, and interest therein, including, but not limited to, intellectual property rights, in perpetuity and throughout the world in any and all media whether now or hereafter known (including, but not limited ....
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....erence to any confidential or proprietary information of the other Party, (ii) that was or becomes generally available to the public other than as a result of action or inaction by a Party, (iii) that was within a Party's possession prior to such information being furnished by the other Party (provided that the source of such information was not known to be bound by an obligation of confidentiality with respect to such information) or (iv) which becomes available to a Party on a non-confidential basis from a source other than the other Party or its representatives, provided that such source is not known to the Party receiving such information, after reasonably inquiry, to be bound by an obligation of confidentiality with respect to such information. 6. Duties and Obligations of Service Provider 6.1 Service Provider agrees to cooperate with Athene's reasonable requests with respect to the scheduling and performance of the Services, and will keep accurate records of its activities undertaken in performance of the Services. Service Provider shall provide such records to Athene in such form and timeframe as agreed between the Parties, and will also provide Athene wi....
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.... Service Provider cessation of work. 8. Service Provider Warranties Service Provider warrants that it has the knowledge, experience and skill to perform the Services, and that it will perform the Services according to the specifications described in this Agreement and SOW in a professional and workmanlike manner. Service Provider warrants that the performance of its Services will not result in the infringement of any patent, copyright, trade secret, or other proprietary right of any third person. 9. Limitation of Liability and Indemnification Neither Party will be liable to the other for special, indirect or consequential damages incurred or suffered by the other arising as a result of or related to Services, whether in contract, tort, or otherwise, even if the other has been advised of the possibility of such loss or damages. Service Provider shall indemnify and hold harmless Athene and its employees, directors and officers against any claims, loses, costs, damages, expenses, attorney fees incurred by Athene arising out of or in conjunction with Service Provider's breach of this Agreement, gross negligence or willful misconduct or inaccurate misrepresentation and warra....
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....he Parties hereby expressly and irrevocably submits to the exclusive jurisdiction of the State of Delaware. Each of the Parties hereby expressly and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any such dispute brought before any such arbitrator that any such dispute has been brought in an inconvenient forum. 14. Attorneys' Fees If any litigation or arbitration is necessary to enforce the terms of this Agreement, the prevailing Party will be entitled to reasonable attorneys' fees and costs. 15. Severability If any term of this Agreement is found to be unenforceable or contrary to law, it will be modified to the least extent necessary to make it enforceable, and the remaining portions of this Agreement will remain in full force and effect. 16. Force Majeure Neither Party will be held responsible for any delay or failure in performance of any part of this Agreement to the extent that such delay is caused by events or circumstances beyond the delayed Party's reasonable control. 17. No Waiver The waiver by any Party of any breach of covenant will not be construed to be ....
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.... independent service provider which qualify as export of services under the service tax provisions and 2 (6) of the IGST Act and allowed and disposed of the petitions as hereunder:- 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 su....
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.... is clear that when a 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 agreemen....
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....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 respondents deserve to be quashed. XXXXXXXXXXXXXXXXXX....
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....und 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 authorities bearing in mind the Circular No. 183/15/2022-GST dated 27.12.2022 and Circular No. 193/05/2023-GST dated 17.07.2023 and in accordance with law. ORDER IN W.P.No. 3376/2023 (i) W.P.No.3376/2024 is hereby partly allowed. (ii) The impugned Order-in-Appeal dated 04.11.2022 vide Annexure-A passed by the respondents insofar 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 de....