2023 (5) TMI 73 - HC - GST

Refund of unutilized Input Tax Credit (ITC) - Export of services or not - petitioner is an Indian branch of Ernst Young Ltd. (EYLUK) and is providing professional services in India on behalf of EYLUK - intermediary service or not - period April, 2020 to March, 2021 - HELD THAT - This Court in a recent judgment M/S. ERNST AND YOUNG LIMITED VERSUS ADDITIONAL COMMISSIONER, CGST APPEALS -II, DELHI AND ANR. 2023 (3) TMI 1117 - DELHI HIGH COURT filed by the present petitioner in relation to the same services for the period December, 2017 to March, 2020, had held that There is no dispute that the recipient of Services that is EY Entities are located outside India. Thus, indisputably, the Services provided by the petitioner would fall within the scope of the definition of the term export of service under Section 2(6) of the IGST Act. It is not disputed that the decision rendered by this Court is fully applicable to the facts of the present case. This Court while considering ERNST AND YOUNG LIMITED, has categorically held that in terms of Section 13(8) of the IGST Act the services rendered by the petitioner are not intermediary services and the same are required to be determined on the basis of the location of the recipient of the services. Recipient of the services in the present case is admittedly outside India and the professional services rendered by the petitioner would fall within the scope of definition of export of services under Section 2(6) of the IGST Act. The impugned order is set aside - petition allowed.

Summary

Issues involved:
The judgment involves the impugning of an order allowing a refund of unutilized Input Tax Credit (ITC) by the Adjudicating Authority, which was later appealed by the Revenue and allowed by the Appellate Authority based on the classification of services as intermediary services and the place of supply under the IGST Act.

Refund of Input Tax Credit (ITC):
The petitioner applied for a refund of ITC for services exported during a specific period, which was initially allowed by the Adjudicating Authority. However, the Revenue appealed against this decision, leading to the Appellate Authority allowing the appeal and disallowing the petitioner's claim for refund of ITC.

Classification of services as intermediary services:
The Appellate Authority classified the services provided by the petitioner as intermediary services, which according to them did not qualify as export of services. This classification was based on the location of the supplier of services under Section 13(8) of the IGST Act, which they interpreted to be in India, thus denying the petitioner's entitlement to claim ITC.

Application of legal precedent:
The judgment referred to a previous case involving the same petitioner and similar services, where the court had held that the services were not intermediary services and should be determined based on the location of the recipient of the services. As the recipient was outside India, the services fell within the definition of export of services under the IGST Act. The court found that the decision in the previous case was fully applicable to the present case, leading to the allowance of the petition and setting aside of the impugned order.