TaxTMI 
TaxTMI 
2026 (1) TMI 1066
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....ormation Technology services and provides such services to its parent company under a Service Agreement dated 01 January 2017 executed between the petitioner and M/s. Vistex Inc., USA. The petitioner contends that the services provided by it to its parent company, qualify as 'export of services' under the provisions of the CGST Act, hence, the petitioner was entitled to a refund of unutilized input tax credit in terms of Section 54(3) of the Central Goods and Services Tax Act, 2017 ('CGST Act'). 4. Accordingly, the petitioner filed three refund applications for different periods: (i) refund application for the period from 01 January 2020 to 31 March 2020; (ii) refund application for the period from 01 April 2020 to 30 September 2020 and (iii) refund application for the period from 01 October 2020 to 31 December 2020. 5. The Assistant Commissioner, CGST, issued a show cause notice dated 19 September 2020 [in Form GST RFD-08], calling upon the petitioner to show cause as to why the petitioner's refund claim be not rejected, basis the verification of documents, as the documents including the said agreement revealed that the petitioner did not satisfy t....
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.... of the company's line of software products, they are arranging and facilitating supply of products of their parent company to customers in India and are rightly covered under the definition of intermediary. 9.1.8 From the above, I find that the respondents are providing consulting/implementation services on parents company's line of products; that these services are provided to Indian Customers on behalf of the parent company; that they are also receiving royalty payments and maintenance charges on parents software products and direct license fees from Indian customers; that these charges collected are appropriated by the respondent to the extent of 30% and remaining 70% is credited to the parent company; that the actual service of consulting and implementation service is provided by the recipient to the Indian customers on behalf of the parent company and they are receiving license fee from the customers for the services of parents company of line of software products; that the services are being provided to Indian customers on behalf of parent company. So, I am of the considered view that they are working as an agent of parent company for provision of service to....
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....xport of services; that refund of accumulated ITC on grounds of export of service is not eligible to them. So, the Refund sanctioned vide Order-in-Original Nos. GST RFD-06 No. ZR27102000025266 dated: 03.10.2020, ZT2701210248246 dated 28/01/2021 and ZZ2705210135039 dated 10/05/2021 to the extent of Rs. 7,49,206/- Rs. 7,48,804/- and Rs. 8,57,664/- respectively are required to be recovered along with applicable Interest from M/s. Vistex Asia Pacific Private Limited. 11. Accordingly, I pass the following order:- 12. The Appeals filed by the Department are allowed, and refund orders bearing nos. (i) ZR27102000025266 dated: 03.10.2020, (ii) ZT2701210248246 dated 28/01/2021, and (iii) ZZ2705210135039 dated 10/05/2021 are set aside." 8. It is on the aforesaid backdrop, the present petition is filed inter alia praying that the impugned order dated 22 February 2022 passed by the appellate authority be quashed and set aside. It is also a prayer that a writ of mandamus be issued to the respondents to hold and declare that the petitioner is entitled to refund on account of export of services. 9. On behalf of the respondents, a reply affidavit o....
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....umps and Compressors India Pvt. Ltd. (supra). We find that the Division Bench, while considering the provisions of Section 16 of the IGST Act, examined the definitions of 'export of goods' (Section 2(5) of the IGST Act), 'export of services' (Section 2(6) of the IGST Act), as also examined the definition of 'agent' under Section 2(5) of the CGST/MGST Act. The Division Bench also considered the relevant circular issued by the Central Board of Indirect Taxes and Customs, bearing No. 161/17/2021-GST, dated 20 September 2021, in the context of 'export of services', particularly with reference to condition (v), Section 2(6) of the IGST Act. In such context, the Division Bench made the following observations:- "31. In terms of the aforesaid Circular, it is clear that what is sought to be covered under condition (v) to Section 2(6) of the IGST Act is the supply of services made by a branch or an agency or representational office of a foreign company, not incorporated in India, to any establishment of the said foreign company outside India, which shall be treated as supply between establishments of distinct persons and shall not be considered as "export of services". Similarly, an....
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....rs India Pvt. Ltd. (supra). We also note the following relevant clauses of the said service agreement hereunder.- "EARLIER AGREEMENT SUPERSEDED Prior hereto the Subsidiary Company was rendering and effecting services as required and desired by the Parent Company on a project basis having and keeping a statement of work for each project on the terms agreed upon and recorded in an Agreement dated 1st day of July 2004 and for services of each project the Parent Company used to and has been remunerating the Subsidiary Company. Now the Subsidiary Company has agreed to work mainly for the Parent Company and hence on this Agreement coming into force and effect, the earlier Agreement dated 1st July 2004 shall by mutual consent stand terminated and ineffective. The business relationship between the said Companies shall now be governed by terms of this Agreement. WORK FLOW & WARRANTY The Parent Company shall provide the requisite designs and the Subsidiary Company shall carry out programming services accordingly. The programming services shall be performed, executed and carried out and attended to in a professional manner in accordance with sound practices....
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....cost as entire cost is borne and paid by Parent company and remaining 30% shall belong to the Subsidiary Company. SUBSIDIARY LIABILITY The Subsidiary Company shall not be liable to the Parent Company for any loss, damage or injury other than for gross negligence of it workers, assistants or employees or by reason of contingencies beyond the control of the Subsidiary Company. The liability of Subsidiary Company shall not exceed the amount of consideration paid to the Subsidiary Company under this Agreement and accordingly the Subsidiary Company shall not be liable for consequential or punitive damages. INDEMNITY The Parent Company shall indemnify the Subsidiary Company and its Directors, officers and employees from any loss, damages, costs or expenses arising from any claim, demand, assessment. action, suit or proceeding arising as a result of gross negligence or intentional avoidance on the part of the Parent Company similarly if by reason of any gross negligence or intentional avoidance of services on the part of the Subsidiary Company any loss or damage is caused, the Subsidiary Company shall indemnify the Parent Company and its Directors/Offic....