TaxTMI 
TaxTMI 
TaxTMI 
2026 (1) TMI 144
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.... And remand the matter back to the Respondent No. 2 for a fresh consideration in the light of the documents produced at Annexure-J." 2. Heard the learned counsel for the parties and perused the material on record. 3. A perusal of the material on record would indicate that in the first instance, the respondent No. 1 passed an order dated 21.12.2023, which was assailed by the petitioner before the second respondent - appellate authority, which dismissed the appeal vide order dated 21.03.2025. Subsequently, the respondent No. 2, suo-moto initiated rectification proceedings and passed an order dated 29.03.2025. Subsequent to which the petitioner filed an application seeking rectification under Section-161 of the Karnataka Goods and Services Tax Act 2017 and Central Goods Services Tax Act 2017, which culminated in the impugned rectification order at Annexure-D, dated 25.08.2025. Aggrieved by the aforesaid orders passed by the respondent Nos.1 and 2 the petitioner is before this Court by way of the present petition. 4. The learned counsel for the petitioner would reiterate various contentions urged in the petition and invite my attention to the documents produced by the ....
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.... doesn't fall in either of these 2 categories above, one can apply for a Foreign Inward Remittance Advice (certificate of inward remittance) from the partner bank that processed the transfer. Advice is only available for businesses 7.15. In the case of Commnr. Of Customs (Import), Mumbai vs M/S. Dilip Kumar And Company on 30 July, 2018, vide CIVIL APPEAL NO. 3327 OF 2007, the Hon'ble Supreme Court of India has held that; "Interpretation of tax exemption Notification/Statutory Provisions and their applicability in the case of ambiguity-correctness of the ratio in Sun Expor corporation, Bombay V. Collector of Customs, Bombay 1997 (7) TMI 117, held that it is the law that any ambiguity in a taxing statute should ensure to the benefit of the assessee, but any ambiguity in the exemption clause of exemption notification must be conferred in favour of revenue and such exemption claims, the burden of proof is cast upon the assessee who claims exemptions. The tax authorities can ask for any supporting documents which they consider as necessary for verification to safeguard the revenue. 7.16. The appellant has failed to prove that the services are exported ....
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.... 2) GLG Invoice # 41: Ledger Statement, Invoice raised, and Bank statement reflecting the specific transaction. ATTACHED AS ANNEXURE-2 3) GLG Invoice # 45: Ledger Statement, Invoice raised, and Bank statement reflecting the specific transaction. We have also attached a specific letter from the bank about the realisation of specific invoices. ATTACHED AS ANNEXURE-3 4) Netop Invoice #51 Ledger statement showing the accounting of invoice and the ledger statement showing the write off of the specific amount, OTTOCHED AS ANNEXURE-4 Request you to take the above on records and allow the same For, S.R.Rarnesh & Co, Chartered Accountant, Sd/- CA Ramesh SR M No. 206309 Place : Bengaluru" 9. In addition thereto this Court in the case of M/S. NOKIA SOLUTIONS AND NETWORKS INDIA PRIVATE LIMITED VS. THE PRINCIPAL COMMISSIONER OF CENTRAL TAX AND OTHERS, disposed of on 22.08.2024, held as under: "ORAL ORDER In this petition, petitioner seeks for the following reliefs:- (a) Issue a writ, order or directions in the nature of certiorari or any other writ, order or direction of like nature quashing the impugne....
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....said refund orders inter alia contending that the petitioner had not submitted Bank Realisation Certificates (BRCs) / Foreign Inward Remittance Certificates (FIRCs) before the 3rd respondent. The revenue also contended that in the FIRAs (Foreign Inward Remittance Advices) submitted by the petitioner, the location of the beneficiary is mentioned as Gurgaon which is different from the petitioner's location at Bengaluru and the purpose of remittance is mentioned as 'against intercompany receipt'. It was also contended that the Invoices submitted by the petitioner mentioned that the payments are to be made in Bank of America, New Delhi Account No.36574019 whereas the FIRAs showed the Account Number as 36574085. It was further contended that the services provided by the petitioner were "intermediary services" in respect of which the petitioner was not entitled to seek refund and that the refund orders are to be set aside on this ground also. 5. During the pendency of the appeal, the 4th respondent issued the impugned Show Cause Notice (SCN) at Annexure-B dated 06.09.2021 seeking to recover the refund sanctioned in favour of the petitioner. The petitioner submitted a reply dated....
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.... with the Circular No. 125/44/2019-GST dated 18.11.2019. (ii) Petitioner had not realised any payment for service supplied in convertible foreign exchange and therefore, the supply of service by the petitioner did not qualify to be "export of services" under Section 2(6) of IGST Act and "Zero rated supply" under Section 16(1)(a) of the IGST Act. (iii) In the FIRA, the location of the beneficiary mentioned as Gurgaon which is different from the petitioner's location at Bengaluru. (iv) In the FIRC, the purpose of remittance is mentioned as "against intercompany receipt" which is not same as remittance for zero rated supply. (v) Petitioner had not followed the prescribed provisions for claiming refund which was in violation of Sections 54(1) and (4) of the CGST Act r/w Rule 89(2)(c) of the CGST Rules and the Circular dated 18.11.2019. (vi) That the services provided by the petitioner qualify to be "intermediary services" within the meaning of Section 2(13) of the IGST Act. 13. In my considered opinion, the impugned orders and SCNs are illegal, arbitrary and contrary to the material on record as well as the provisions of the CGST Ac....
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....elhi, while the FIRAs show the Account Number as No.36574085 at Bengaluru; in this context, the respondents failed to appreciate that both the aforesaid Accounts belonged to the petitioner and this variance in the Account Numbers was neither relevant nor material for the purpose of considering the refund claim of the petitioner and on this ground also, the impugned orders passed by the respondents 2 and 5 deserve to be set aside. (iv) The respondents 2 and 5 erred in failing to appreciate that once the eBRCs, FIRAs and other corroborative documents had been produced by the petitioner, thereby establishing that export proceeds were realised for export of services made by the petitioner to its overseas entity, merely because all the documents had not been produced before the 3rd respondent along with the refund claim, the said circumstance could not have been made the basis to either dispute receipt of foreign exchange or reject the refund claim of the petitioner, especially when sufficient proof of such receipt was available on record and as such, the impugned orders passed by respondents 2 and 5 deserve to be quashed. (v) In Abb India vs. Union of India - 2020 (37....
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..../'Certificate of Receipt of Supply' to ascertain the genuineness of the discharge of the export obligation more particularly, the statutory authorities namely, the Range Superintendent of Central Excise and the Development Commissioner, SEZ have appended their signature on these certificates. These Statutory Authorities would not have appended their signature and allowed the endorsement or the affixation of a stamp, unless they were satisfied that these are the very ARE-1 forms issued at the relevant point of time which co-related with advance authorization and its number and date. On examining these consumption certificates, the Authorities could have condoned requirements of generating the bill of export and raising an objection that ARE-1 forms submitted without the number and date, would be hyper-technical. In the circumstances of the case where substantial material was placed on record to establish the factum of the export as contemplated under the Act and Rules or in other words, complying with the requirement contemplated under the Act and Rules, supplying the goods from the domestic tariff area to SEZ, considered to be equivalent to an export of goods physically fro....
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....gs, the appellate and the revisional authority did not embark upon such exercise and they dismissed the appeal/revision on technical grounds. Thus, the petitioner having come into possession of the bank certificate of export and realisation should not be non-suited on technical grounds and therefore, this Court is inclined to issue necessary directions in this regard. (vii) So also in Commissioner of Customs v. Jindal Drugs Ltd., - 2018 (360) ELT 988 (Bom.), the Hon'ble Division Bench of the Bombay High Court held as under :- 9. Even assuming that Clause-9 of the refund application requires production of certain documents, it is purely a procedural requirement and only on the basis of non-production of documents the claim of refund could not have been rejected. If the refund claim could be decided on the basis of available material on record, the same ought to have been decided without mechanically insisting upon the production of documents listed in Clause-9. In fact, as stated earlier, perusal of the orders-in-original and the order in appeal shows that the refund applications were rejected only on the ground of non-production of documents without even consideri....
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.... got verified by the adjudicating authority from the concerned customs range office and they were found to be correct. Hence, the rejection of the rebate claim only due to non-submission of original and photocopy of ARE-1 was not upheld by the Commissioner of Income Tax (Appeals). We do not see how the revisional authority could have interfered with such an order. The scope of revisional proceedings is now well settled. The powers have to be exercised so as to correct a jurisdictional error. In the absence of a conclusion that the findings are vitiated by an error of jurisdiction or the jurisdiction has been exercised with material irregularity resulting in manifest injustice, the revisional authority should not have interfered with the orders under challenge. That is not a power to interfere with factual findings and when they are supported by enough materials. The findings of fact consistent with the materials on record would bind the revisional authority unless they are demonstrated to be perverse or vitiated by any error of law apparent on the face of the record. There is no warrant to interfere with the same unless these tests are satisfied. We find that paras 9.1, 9.2 and 9.3....
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....duty claimed and that no rebate on duty paid on excisable goods shall be granted where the export of the goods is prohibited under any law for the time being in force. The procedure governing the grant of rebate of central excise duty is specified in the same notification dated 6 September 2004 separately. Broadly speaking the procedure envisages that the exporter has to present four copies of an application in form ARE-1 to the Superintendent of Central Excise. The Superintendent has to verify the identity of the goods and the particulars of the duty paid and after sealing the packet or container, he is required to return the original and duplicate copies of the application to the exporter. The triplicate copy is to be sent to the officer with whom a rebate claim is to be filed either by post or by handing it over to the exporter in a tamper proof sealed cover. After the goods arrive at the place of export, they are presented together with the original and duplicate copies of the application to the Commissioner of Customs. The Commissioner of Customs after examining the consignment with the particulars cited in the application is to allow the export if he finds that the particular....
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.... procedural or technical has been made in a judgment of the Supreme Court in Mangalore Chemicals & Fertilizers Ltd. v. Deputy Commissioner. The Supreme Court held that the mere fact that a provision is contained in a statutory instruction "does not matter one way or the other". The Supreme Court held that non-compliance of a condition which is substantive and fundamental to the policy underlying the grant of an exemption would result in an invalidation of the claim. On the other hand, other requirements may merely belong to the area of procedure and it would be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purposes which they were intended to serve at paragraph 11. The Supreme Court held as follows : "The mere fact that it is statutory does not matter one way or the other. There are conditions and conditions. Some may be substantive, mandatory and based on considerations of policy and some other may merely belong to the area of procedure. It will be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purposes they were intended to serve." 14. The particulars which are c....
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....e same before the First Appellate Authority in Appeal No. 28 of 2011. The First Appellate Authority, by order dated 18.10.2011, disposed the appeal by remitting the matter back to the Original Authority with a further direction to the petitioner to produce the Bank Realisation Certificate to the lower Authority for verification and with a further direction to the lower Authority to verify the Bank Realisation Certificate, as per the guideline given in paragraph 04.1 and allow the duty drawback if any as per law. The relevant portion of the said order is extracted hereunder: "In the instant appeal, the appellants have exported their goods and submitted the Bank realization Certificate and Bank Advice Certificate for the realization of their sale proceeds. The lower authority has stated that the appellants have produced Bank Realization Certificate which was not in the prescribed format and Foreign Inward Certificate from the bankers as a proof for receipt is not a valid and acceptable document under CBEC Board's Circular No. 05/2009-Cus dated 02.02.2009. Only the Bank Realization Certificate will be acceptable according to the prescribed format, is only valid document. ....
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....t confirmation of such order passed by the Original Authority in the further appeal and revision also cannot be sustained, unless the Original Authority consider the Bank Realisation Certificate produced by the petitioner and give a specific finding as to whether those Bank Realisation Certificates are containing the required particulars for allowing the duty drawback. 11. Therefore, the writ petition is allowed and the impugned order is set aside. Consequently, the matter is remitted back to the Original Authority viz., the second respondent herein for passing fresh order in the light of the order passed by the Appellate Authority in Appeal No. 38/2011 dated 18.10.2011. The petitioner should also be given an opportunity of personal hearing. The Original Authority shall pass such fresh order within a period of four weeks from the date of receipt of a copy of this order. No costs. The connected miscellaneous petition is closed.' (x) In the Circular dated 18.11.2019, the respondents themselves had issued guidelines on various issues relating to refund claims. At paragraph-48 of the said Circular, the respondents have clarified as under: - 48. It is clarifie....
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....ill 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 the Central Board of Direct Taxes, India ("CBDT") on March 28, 2016 and has agreed on the arm's length price of the Services provided to ....
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....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/tested by it and shall provide regular update to the Recipient for it to analyse the progress of the project against the project plan. ....
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....#39;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 fee ("Service Fee") to the Provider as follows, unless otherwise agreed in writing by the Parties. 2.1.2. Service....
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....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 will raise monthly invoice of the Service Fee on the Recipient as per Consideration methodology defined under clause 2.1 ab....
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....s 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 person involved in supply of main supply on principal to principal basis to another person cannot be conside....
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....intenance 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 own account. (xi) In the instant case, none of the aforesaid criteria / requirement is fulfilled....
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.... 1764, held as under:- 23. It is apparent that the Adjudicating Authority has interpreted the last limb of the definition of 'intermediary' under Section 2(13) of the IGST Act as controlling the definition of the term. We are unable to agree with this interpretation. The limb of Section 2(13) of the IGST Act reads as "but does not include a person who supplies such goods or services or both or securities on his own account" but this does not control the definition of the term 'intermediary'; it merely restricts the main definition. The opening lines of Section 2(13) of the IGST Act expressly provides that an intermediary means a broker, agent or any other person who "arranges or facilitates supply of goods or services or both or securities between two or more persons". The last line of the definition merely clarifies that the definition is not to be read in an expansive manner and would not include a person who supplies goods, services or securities on his own account. There may be services, which may entail outsourcing some constituent part to a third party. But that would not be construed as intermediary services, if the service provider provides services....
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....s' another supply (the 'main supply', between two or more other persons and, does not himself provide the main supply." 18. Admittedly, in the present case, the petitioner is rendering the market research services directly to OHMI, Japan. Therefore, insofar as providing market research services is concerned, the petitioner cannot be held to be an intermediary. (xv) So also, in Xilinx India Technology Services (P) Ltd. v. Commr.,- 2023 SCC OnLine Del 5628, the Delhi High Court held as under:- 9. The petitioner is a separate entity and it is settled law that identity of an incorporated company is separate from that of its shareholders. This fundamental proposition was reiterated by the Constitution Bench of the Supreme Court in Bacha F. Guzdar v. Commissioner of Income-Tax, AIR 1955 SC 74. 10. The services rendered by a subsidiary of a foreign company to its holding are not covered under Section 2(6)(v) of the IGST Act and the same is beyond any pale of controversy in view of the Circular dated 20.09.2022 issued by the CBIC. The said circular, in unambiguous terms, clarifies as under: "5.1. In view of the above, it is clarified that a ....
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.... to forthwith process the petitioner's claim for refund along with interest. (xvi) The Delhi High Court examining the requirements of an 'intermediary' in Boks Business Services (P) Ltd. v. Commr. (CGST) - 2023 SCC OnLine Del 5312, held as under:- 10. It is clear from the aforesaid terms, that the petitioner is not an intermediary, inasmuch, as the petitioner is neither facilitating the provision of services by a third entity nor acting as a middleman for procuring such services for its affiliate. The petitioner is, in fact, contracted to provide the services, and is the principal service provider in the context of the services provided by it - book keeping, payrolls, and accounts through the use of cloud technology. 11. In case of intermediary services, there are three entities - one providing the principal service, one receiving the principal service, and an intermediary who acts as an agent or a broker for facilitating or arranging such services for the service recipient.' 14. The aforesaid facts and circumstances and the principles enunciated in the aforesaid judgments clearly establish that respondents 2 and 5 committed an error in setti....