2026-VIL-269-GSTAT-PB
  1. Home
  2. 2026-VIL-269-GSTAT-PB

SGST Tribunal

GST - Jurisdiction of Principal Bench of the GSTAT under proviso to Section 109(5) of the CGST Act, 2017 where the dispute is whether services are intermediary services or export of services - Appellant, a subsidiary of an overseas group, rendered services to its overseas group entities, treated them as export of services, and filed refund claims of unutilised Input Tax Credit – Rejection of refund on the ground that the services were intermediary services - Revenue objected that the dispute was whether the Appellant is an intermediary or whether the conditions of export are satisfied, and not one relating to place of supply, so that the Principal Bench lacked jurisdiction - Appellant contended that the essential question is the place of supply since it determines the incidence of GST - Whether the case involves an issue relating to place of supply so as to fall within the exclusive jurisdiction of the Principal Bench - HELD - Section 109(5) provides that cases in which any one of the issues involved relates to the place of supply shall be heard only by the Principal Bench. Place of supply is defined by reference to Chapter V of the IGST Act, and under Section 13(8)(b), as it stood before its omission, the place of supply of intermediary services was the location of the supplier of services, which here is India. If the Appellant is an intermediary, the place of supply is in India, whereas if it is not an intermediary, the services are exported and the place of supply is outside India, so that no GST is leviable. The refund can therefore be decided only after determining whether the supply is made in India or outside India. Though the main issue is whether the services are intermediary services or export, it necessarily involves the question of place of supply - The contention of Revenue that the case does not fall within the jurisdiction of the Principal Bench is not accepted and the objection is rejected - Classification of support services and software development services rendered to overseas group entities as export of services or intermediary services under Sections 2(6) and 2(13) of the IGST Act, 2017 - Appellant provided contract software development services and support services to its overseas parent and group companies on a cost plus mark-up basis, under agreements - Appellant treated the services as export of services without payment of tax and claimed refund of unutilised Input Tax Credit, which was rejected by the adjudicating authority and the FAA treating it as intermediary service - Whether the services qualify as export of services or fall within the definition of intermediary services - HELD - An intermediary under Section 2(13) is a broker, an agent or any other person who arranges or facilitates the supply of goods or services or securities between two or more persons, but does not include a person who supplies such goods or services on his own account. The Board Circular clarifies that the concept requires a minimum of three parties and two distinct supplies, namely the main supply between the principals and the ancillary supply of facilitation, that a person involved in the main supply on a principal-to-principal basis is not an intermediary, and that sub-contracting for a service is not an intermediary service - The expression ‘any other person’ has to be read in the light of the doctrine of ejusdem generis and cannot include a person who is unable to bind the foreign principal with an obligation or duty or to act on its behalf. The Appellant and its parent entered into agreements on a principal-to-principal basis, there is no agency or brokerage, and no provision of the agreements creates any obligation on the foreign company to be undertaken by the Appellant. The contract is strictly between the Appellant and the foreign company, there is no privity of contract between the Appellant and the customers of the foreign company, and the Appellant supplies the services on its own account - The conditions of Section 2(6) are satisfied, since the supplier is located in India, the recipient is located outside India, the place of supply is outside India, and payment is received in convertible foreign exchange - The services are not intermediary services but export of services. The impugned orders are set aside, and the Respondent is directed to refund the unutilised Input Tax Credit along with interest as per Section 56 of the CGST Act - The appeals are allowed - Rejection of refund claim on grounds beyond the SCN and violation of natural justice - Refund of unutilised Input Tax Credit on export of services - The SCN and the adjudication order in one of the appeals additionally rejected the claim on the grounds of mismatch between the BRC and export invoices, invoices not appearing in GSTR-2A and lack of nexus of certain inputs with the business - Whether the refund claim could be rejected on such additional grounds when the SCN did not specify them and the FAA recorded no findings thereon - HELD - The SCN did not specify the alleged deficiencies. The FAA ignored the issue and recorded no clear finding supported by reasoning, and there is hardly any discussion of these grounds in the orders below. The SCN was not a proper as the grounds for rejecting the refund application were not elaborated and their particulars were not communicated to the Appellant - The orders travel beyond the scope of the SCN and violate the principles of natural justice, and are therefore not sustainable.
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Dr. G. Gokul Kishore

Weekly Summary

VIL Video

57th GST Council Decisions...
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?