2023 (10) TMI 934 - HC - GST

Refund of Integrated Goods and Service Tax - telecom services provided by the petitioner to inbound subscribers of FTOs - Export of services or not - claims preferred were beyond the period of two years from the relevant dates and therefore, were barred by limitation. Whether the claims made by the petitioner are barred by limitation? - HELD THAT - In the present case, the petitioner claims that it had received payments in all cases after the invoices were raised. Thus, the date on which payments had been received from FTOs would be the relevant date for the purpose limitation under Section 54(1) of the CGST Act. The petitioner had also furnished a tabular statement clearly indicating the invoices raised and the dates of receipt of payments. However, the authorities had rejected the claim by mentioning that payments in respect of some of the invoices were received in advance. It is material to note that there is no specific reference to the invoices in respect of which payments are held to have been received in advance, that is, prior to the date of their issuance - Undisputedly, in case the payments had been received after the invoices were raised, the date on receipt of payments would be relevant for the purposes of computing the limitation for filing claims for refund. Whether the services in question constitute export of services within the meaning of Section 2(6) of the IGST Act? - HELD THAT - It is apparent that the provisions for ascertaining the place of supply of services under Rule 6A of the ST Rules are similar to Section 2(6) of the IGST Act inasmuch as the services will be treated as export of services when (a) the provider of service is located in the taxable territory, (b) the recipient of the service is located outside India, and (d) the place of provision of the service is outside India. There is no cavil that the decisions rendered on the question of export of services in the context of Rule 3 of the Export of Services Rules, 2005 are also applicable to the controversy in question. The present petition is allowed and the respondents are directed to refund the amounts as claimed by the petitioner - Application disposed off.

Summary

Issues Involved:
1. Whether the telecom services provided by the petitioner constitute export of services.
2. Whether the refund claims were within the period of limitation as specified under Section 54(1) of the CGST Act.

Summary:

Issue 1: Export of Services

The petitioner contended that the connectivity services rendered to inbound subscribers of Foreign Telecom Operators (FTOs) qualify as export of services since the services are rendered to entities resident outside India (FTOs). The petitioner argued that it provided services to FTOs, which in turn made these services available to their customers visiting India. The consideration for these services was paid by the FTOs to the petitioner.

The Adjudicating Authorities and the Appellate Authority rejected the refund claims, stating that the services did not qualify as export of services because the recipients (inbound roamers) were physically present in India and consumed the services in India. Additionally, they argued that the petitioner, being bound by the Indian Telegraph Act, 1885, could not provide services to FTOs situated abroad.

The court referred to the decision in Verizon Communication India Pvt. Ltd. v. Assistant Commissioner of Service Tax, Delhi-III, which held that similar services qualified as export of services under the Service Tax Rules, 1994. The court noted that the provisions for determining the place of supply under the IGST Act are similar to those under the Service Tax Rules. The court also observed that the Customs Excise and Service Tax Appellate Tribunal had allowed similar appeals by the petitioner, directing refunds.

In view of these precedents, the court concluded that the services in question qualify as export of services, and the petitioner is entitled to the claimed refunds.

Issue 2: Period of Limitation

The petitioner argued that its claims for refund were within the prescribed period as it had received payments after the date of invoices, and the claims were made within two years of receipt of remittances. The Adjudicating Authorities rejected the claims, stating that some payments were received in advance of the invoices, making the claims time-barred under Section 54 of the CGST Act.

The court noted that the petitioner had provided a tabular statement indicating the dates of invoices and payments. The authorities had not specifically identified any invoices for which payments were received in advance. Furthermore, the court highlighted a CBIC notification (GST Notification 13/2022-Central Tax dated 05.07.2022) that relaxed the period of limitation for filing refund claims, excluding the period from 01.03.2020 to 28.02.2022 from the computation.

Given this notification, the court concluded that the controversy over the limitation period was no longer contentious, and the claims were within the permissible period.

Conclusion:

The court allowed the petition, directing the respondents to refund the amounts claimed by the petitioner. The pending applications were also disposed of.