2026-VIL-1138-CESTAT-CHD-ST
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SERVICE TAX CESTAT Cases

Service Tax - Export of Business Support Services vs. Intermediary Services, Refund of unutilized CENVAT Credit – Appellant is engaged by its overseas parent entity to provide Business Support Services including market research, vendor selection, quality inspection, trademark protection compliance, and logistics coordination for procurement of goods from India on a cost-plus mark-up basis - Whether business support services comprising market research, vendor information gathering, quality inspection and logistics coordination provided by an Indian company to its overseas principal entity qualify as 'export of services' under Rule 6A of the Service Tax Rules, 1994, or constitute 'intermediary services' as defined under Rule 2(f) of the Place of Provision of Services Rules, 2012 – HELD - The critical distinction in determining intermediary services lies in the relationship between the service provider and recipient and the nature of services provided. Intermediary services require the intermediary to act as an agent, broker or facilitator arranging or facilitating services between two or more persons, which necessarily implies authority to contract with third parties on behalf of the principal - In the present case, the service provider acted as an independent contractor providing services directly to the overseas entity on a principal-to-principal basis without any tripartite arrangement with vendors. The service provider neither had authority to approve or conclude contracts on behalf of the overseas entity nor did it facilitate transactions between the overseas entity and vendors; rather, it provided information and performed quality checks upon instructions from the principal. The consideration received by the service provider was based on cost-plus mark-up and was independent of the value of goods supplied by vendors, thereby negating any element of facilitation or arrangement of supply – The appellant is entitled to refund of unutilized CENVAT Credit. The impugned order rejecting the refund claim is set aside and the appeal is allowed
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