2026-VIL-209-GSTAT-DEL-PB
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  2. 2026-VIL-209-GSTAT-DEL-PB

SGST Tribunal

GST - Refund of Unutilised Input Tax Credit on Export of Services - Services Rendered to Foreign Group Entity as Sub-Contractor not Intermediary Services under Section 2(13) of IGST Act, 2017 - Appellant, an Indian subsidiary, provided marketing support services and IT enabled services to its Australian parent under a Master Services Agreement on a cost-plus basis, receiving consideration in convertible foreign exchange - Refund claims for several periods under Section 54 of the CGST Act read with Section 16 of the IGST Act were rejected on the ground that the services were intermediary services - Whether the services rendered by the Appellant qualify as export of services under Section 2(6) of the IGST Act or fall within intermediary services under Section 2(13) - HELD - An intermediary requires a minimum of three parties and two distinct supplies, namely the main supply and an ancillary supply of arranging or facilitating it. The Appellant is not a broker or agent, has no authority to bind the principal, and the expression any other person by whatever name called must be read on the principle of ejusdem generis - The agreements expressly provide that the Appellant is an independent contractor and not an agent, and it has no contract with the partner universities or the advisors. A person who supplies services on his own account is excluded from the definition, and as per Circular No. 159/15/2021-GST sub-contracting for a service is not an intermediary service - The Appellant supplies the main service to its principal on a principal-to-principal basis. This view is consistent with the various High Court judgments. The rulings of Advance Ruling Authorities relied on by the Revenue are not binding as they are not courts of record, and the High Court judgments are followed - The services therefore qualify as export of services under Section 2(6) of the IGST Act - The orders of the First Appellate Authority are set aside, and the Respondent is directed to refund the unutilised input tax credit along with interest – Ordered accordingly - Power of First Appellate Authority to annul order and direct reconsideration - Bar on Remand under Section 107(11) of CGST Act, 2017 - The Revenue appealed against an order of the FAA which held the refund order incorrect but, instead of allowing the appeal, annulled the order of the proper officer and directed him to reconsider the matter in light of High Court orders - Revenue contended that this was a remand in violation of Section 107(11) of the CGST Act - Whether the order annulling the Order-in-Original and asking the officer to reconsider is in fact a remand order prohibited by law - HELD - Section 107(11) empowers the Appellate Authority to pass such order as it thinks just and proper, confirming, modifying or annulling the decision or order appealed against, but expressly provides that it shall not refer the case back to the adjudicating authority that passed the order. A plain reading shows that the Appellate Authority has jurisdiction to annul an order but cannot direct reconsideration by the authorised officer. Where a specific type of order is expressly prohibited by statute, the Appellate Authority cannot circumvent the bar by a choice of words and pass an order which in substance is a remand order - The Revenue appeal is allowed to that extent, and the matter is remanded to the FAA to decide it on merits in accordance with the principles laid down by the Tribunal.
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