TaxTMI 
TaxTMI 
2026 (1) TMI 145
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....697/- in terms of Refund Application dated 05.01.2023 vide Annexure-F; iv. Direct Respondent No. 1 to process and sanction the above-mentioned refund claims of the petitioner at the earliest; v. Pass such other order(s) and other reliefs as the nature and circumstances of the case may require." 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that petitioner having filed a refund claim of Rs. 18,92,697/- for the period April 2021 to March 2022 on 05.01.2023, the same came to be rejected vide Order-in-original dated 02.03.2023 as hereunder: "Discussion and findings:- 5. On scrutiny of their refund application it was observed that they have declared to have Services Agreement dated 01.04.2021 entered between the claimants and M/s. Excelpoint exported marketing support services and technical support services, as per the Management systems (PTE) Ltd. Singapore. The services supplied are declared to be export of services without payment of tax. However. During the verification of the export invoices and service agreement re....
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....ners iii. An employer and an employee Any person holds at least 25% of shares in another company either directly or indirectly iv. One of them controls the other directly or indirectly v. They are under common control or management vi. The entities together control another entity vii. They are members of the same family viii. Persons include a legal person who can be individuals, HUF, company, firm, LLP. co-operative society, body of individuals, local authority, government etc or an artificial juridical person. It also includes entities incorporated outside India. Persons who are associated with one another's business or is a sole agent or sole distributor or sole concessionaire shall be deemed to be related. On a plain reading of the aforesaid Section, it is observed that the claimant and its parent/Holding company is a related company which provides services on behalf of their parent Company Excelpoint Systems PTE, Singapore' and receives the consideration with 10% mark up of the total cost, as stated in Service Agreement. M/s Excelpoint Systems (India) Pvt. Ltd., India is the related Indian subsidiary of M/s.Excelpo....
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....ement of facilitation of the supply of goods, services or securities In addition to the definition, in order to qualify as an intermediary, there should be two supplies at any one time; a. The supply between the principal and the third party, b. The supply of his own service (agency service) to his principal, for which a fee or commission is usually charged. 7.1. The operative part of the definition of intermediary is two arranges or facilitates the supply of goods or services or both or securities. Thus, an intermediary is one who arranges or facilitates supply of goods or services or both, belonging to the principle. Therefore, the nature of goods or services supplied by the intermediary must be same as goods or services supplied by the principal. If the nature of supply of goods or services by some person is different from the supply of principal, it cannot be said that the person is merely arranging or facilitates supply of goods or services. An intermediary cannot alter the nature or value of supply, which he facilitates on behalf of his principal Further, a person can arrange facilitates supply of goods or services belonging to some other person onl....
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....ces or both or securities, between two or more persons, but does not include person who supplies such goods or services or both or securities on his own account." 7.3 In terms of Section 2(6) of the Integrated Goods and Services Tax (IGST) Act, 2017, "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; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; In terms of Section 2(15)(a) of the Integrated Goods and Services Tax Act, 2017; "location of the supplier of services" means, (a) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business, In terms of Section 13 (8)(b) of the Integrated Goods and Services Tax (IGST) Act,2017; ....
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....t to such customers with respect to such products. Also, such technical and consulting services are clearly to facilitate the supply of main service. Further, it is clear from the submissions, that the claimant is not a supplier of the main supply i.e. the sale of proprietary software/hardware products of oversees entity to the end customers on its own account. The claimant in its reply has submitted that he does not act as an agent/ broker etc., however from the terms of engagement, stated in the Agreement dated 01:04.2021, it can be made out that the claimant facilitates some other supply, and does not himself provides the main supply and thereby it is covered under the clause of agent/ broker/ by whatever name it may be called for the purpose of intermediary Based on the above discussion, with respect to services' being rendered by the claimant, it can be concluded that the conditions stipulated in the Circular No. 159/15/2021-GST dated 20.09.2021. for being an intermediary are met. Therefore, I find that impugned services falls under the definition of intermediary services. These services are clearly in the nature of facilitation of the main supply (i.e. supply of software prod....
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.... undertake all the activities of facilitating the transfer in India and to act according to the terms and policies of their clients. The charges payable as consideration for the said services also is specifically agreed upon. It is not mandated in law that the fee charged should not be on cost plus markup basis. The value of intermediary services provided by Claimant in India to their clients is clearly distinguishable/identifiable the main supply. Hence, the contention of the claimant that they provide the main service on their own account is not tenable. Therefore, the claimant's contention that the impugned services provided by them to their foreign clients is not Intermediary services is not tenable and unsustainable. 8.1 In view of the above provisions of the CGST/IGST Acts, I find that for the impugned services, the place of supply of such services is the location of the service provider in terms of Section 13(8) of the IGST Act. The location of claimant, the service provider in India/taxable territory in terms of on Section 2(15)(a) of the IGST Act, as claimant are registered with GST in India. Therefore, it is evident that the place of supply of the impugned servic....
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.... 11. Whether the taxpayer has filed the valid returns due till the time of filing the claim: The claimant has filed valid GSTR-1 and GSTR 3B returns due till the time of filing the claim. 12. Breakup of amount claimed and debited: The claim is for a total amount of Rs. 1892697/- and the details as mentioned below: Details IGST CGST SGST Others Total Amount claimed 458644 717026 717027 0 1892697 Amount debited 458644 717026 717027 0 1892697 The above amount has been debited from the electronic credit ledger vide reference no DI2901230008255 dated 05.01.2023. 13. Whether the claimant has claimed drawback: The claimant has declared that they have not claimed drawback in respect of Central Tax, Integrated Tax, State/Union Territory Tax or claimed refund of Integrated Tax on zero rated supplies as required under 3 proviso to Section 54(3) of the CGST Act, 2017. 14. Letter of Undertaking/Bond Details: The claimant has declared that the zero-rated supplies of Services made without payment of tax during the period of April 2021 to March 2022 was made under LUT or Bond issued vide ARN-AD290321005726....
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....been verified against HSN codes and GSTR 2A submitted by the applicant and found to be in order. Claimant has also submitted declaration to the extent stating that there is no benefit claimed under Rule 89(4A) and (4B) of CGST Rules 2017. There is no HSN that pertains to blocked credit under Section 17(5) of CGST Act 2017. Therefore, NET ITC eligible is Rs. 1892697/- as declared in RFD-01. 17. ZERO RATED TURNOVER: The Claimant has considered Rs. 17,67,80,587/- as the Foreign Inward Remittance amount received during the relevant period as the turnover of aero-rated supply of services which is reflected in Statement 3A in RFD-01. The relevant FIRAs are verified as correlated with invoice nos. in Statement 3. However, as per Sec 2(6)(iii) of IGST Act 2017, and as discussed in above paras by treating the services provided by claimant as intermediatory services' the turnover Zero Rated Turnover has to be treated as NIL. Hence for the purpose of subject refund claim, the Turnover of Zero-rated supply of services is restricted to Rs. 0/-. 18. Declarations: The claimant has submitted the following declarations in support of the said refund claim: (a) Undertaking ....
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....CCE0004DIZE." 4. The said aforesaid order of rejection was confirmed by the Appellate Authority by holding as hereunder: Discussion & Findings: 5. I have carefully examined the records of the case, impugned order, grounds of appeal filed by the appellant, written submissions as well as submissions made by the appellant during Personal Hearing. 6. The issue to be decided is whether the appellant is eligible to avail refund of Rs. 18,92,697/- for the period April 2021 to March 2022, on account of export of services without payment of tax which was rejected by the order issued by the respondent or otherwise and whether the impugned services provided by the appellant can be considered as "Intermediary services? 7.1. Before adverting to the submissions made by the appellant, I would like to reproduce the relevant provisions of the CGST Act pertaining to intermediary service for ease of reference. As per Section 2(13) of the Integrated Goods and Services Tax, 2017 intermediary is defined as: "intermediary" means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or servi....
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....vices; (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 of "intermediary" itself provides that intermediary service provider means a broker, an agent or any other person, by whatever name called...... This part of the definition is not inclusive but uses the expression "means" and does not expand the definition by any known expression of expansion such as "and includes". The use of the expression "arranges or 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 p....
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....d to discuss the issues raised in the impugned order based on the submissions made by the appellant and the relevant statutory provisions 7.3. The respondent has rejected the impugned refund claim filed by the appellant on the grounds that as the supplies made by the appellant are found to be taxable services provided in India i.e., domestic supply of services, the refund of tax paid on such taxable supplies provided in India is not admissible under Section 54 of the CGST Act, 2017. The appellant by relying upon the Management Service Agreement entered into with Excelpoint Systems (PTE) Ltd, Singapore with effect from 01.04.2021 has inter alia contended that they are providing marketing support services and technical support services on their own account, that the nature of the services provided by the appellant does not fall under intermediary services and hence qualifies as export of service, that they are relying on CESTAT Bangalore vide FO No 20109-20114/2022 dated 28.03.2022 allowing the appeal in respect of their own case under Service Tax regime. 7.4. On perusal of the said Management Service Agreement entered into by the appellant with Excelpoint Systems (....
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.... to facilitate the promotion of the goods/products of Excelpoint Systems (PTE) Limited, Singapore. The entire activity undertaken by the appellant in India includes data collection, statistical and business analysis of the products and the customer markets of their parent company, educating potential customers identified by the parent company with a view to promote the products of the parent company, providing potential customers with information on the benefits and features of the products of the parent company, executing specific advertising strategy formulated by the parent company to facilitate the sale of products and providing technical support services including advisory support in relation technical queries/clarifications requested for by the parent company. Also, such services are purely in the nature of arranging or facilitating the supply of main service i.e., supply of products by Excelpoint Systems (PTE) Limited, Singapore to their customers in India. Further, the appellant is not part of the main supply on principal-to-principal basis and is working as pure agent in the case of main supply. From the facts of the case, it is evident that the appellant is only a facilit....
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....ervices 7.11. Further, to qualify a transaction of supply of services as export of services that transaction has to satisfy all five ingredients of the definition of export of services simultaneously. In the instant case I find that the condition at Section 2(6)(iii) of IGST Act is not satisfied. The impugned services do not qualify as export of services in as much as the place of supply of such services is in the taxable territory. 7.12. In the case of Airbus Group India Pvt Ltd (2021 (54) G.S.T.L. 194 (A.A.R.-G.S.T.-Kar)), the Authority for Advance Ruling under G.S.T. Karnataka has held at para 19 as under: Facilitation of supplies for holding company located abroad Place of supply to be India in terms of Section 13(8) of Integrated Goods and Services Tax Act, 2017 Thus, services not qualify as 'export of services in terms of sub-section (6) of Section 2 of Integrated Goods and Services Tax Act, 2017 7.13. Therefore, and relying upon the above decision, I find that in respect of the impugned services, the appellant is providing intermediary services to their foreign client and the location of the supplier is India and the place of supply of ser....
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.... in a detailed way and passed a well-reasoned speaking order and hence, there is no reason to interfere with the impugned order. 8. In view of the above, I pass the following order. Order I reject the Appeal No. 171/2023 GST JC Appeals-1 filed by M/s Excelpoint Systems (India) Private Limited against Order in Original No. 123/2022-23 (GST-R) dated 02.03.2023 passed by the Assistant Commissioner of Central Tax, East Division-2, GST East Commissionerate, Bengaluru being devoid of merits and the impugned Order is upheld. Accordingly, Appeal No. 171/2023 GST JC Appeals-I is disposed off." 5. It is the case of the petitioner that it is not an intermediary service provider and since the services provided by the petitioner amounts to export of service, petitioner is not liable to pay IGST as demanded by the respondents as held in the following judgments: a. M/s. Amazon Development Centre India Pvt. Ltd. Vs. Commissioner of Central Tax GST (Appeals), Bengaluru - 2025 (5) TMI 150 - Karnataka. b. M/s. Columbia Sportswear India Sourcing Pvt. Ltd. Vs. Union of India - 2025 (5) TMI 2139 - Karnataka. c. M/s. Athene Technologies In....