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2023 (11) TMI 950 - HC - GSTRefund claim - services exported by the appellant fulfilled the conditions of export under Section 2 (b) (v) of IGST Act, 2017 or not - intermediary services or not - HELD THAT - It is not in dispute that the petitioner is a public limited company incorporated in India, in consonance with the Indian Companies Act, 1956. The petitioner is also registered with the department under GST vide Registration No. 06AABCD7720L1ZM dated 01.07.2017 whereas FKDG is a company incorporated in Germany. The petitioner does not carry out any marketing of the products of FKDG nor any product is delivered by FKDG to it. The activities performed by the petitioner are original activities and for doing the same, it has been charging costs from FKDG. Therefore, it cannot be stated to be intermediary of FKDG and the services provided by it to FKDG cannot be stated to be intermediary services. Thus, a wrong observation has been made by the respondents in this regard. The orders dated 13.09.2019 (Annexure P-10) dated 04.03.2021 (Annexure P-12) are set aside and the writ petitioner is entitled to seek refund for the period from July 2017 to March 2019 from the respondents. The respondents are accordingly directed to release the refund amount to the petitioner within a period of four weeks. Petition allowed.
Issues Involved:
1. Quashing of orders rejecting refund claims. 2. Determination of whether the services provided qualify as "Export of Services" under the IGST Act, 2017. 3. Compliance with procedural requirements for issuing show cause notices. Summary: Quashing of Orders Rejecting Refund Claims: The petitioner sought quashing of the orders dated 13.09.2019 and 04.03.2021, which rejected their refund claims for the period July 2017 to March 2019. The court found that the petitioner had submitted eight refund claims, but show cause notices were issued only for three of these claims. The lack of show cause notices for the remaining five claims was acknowledged by the respondents, making the rejection of these claims procedurally flawed. Determination of "Export of Services": The petitioner, a leading pharmaceutical company in oncology, entered into agreements with FKDG, Germany, to provide various services. The court examined whether these services met the conditions for "Export of Services" under Section 2(6) of the IGST Act, 2017. The conditions include: - The supplier of service is located in India. - The recipient of service is located outside India. - The place of supply of service is outside India. - Payment is received in convertible foreign exchange. - The supplier and recipient are not merely establishments of a distinct person. The court found that the petitioner fulfilled all these conditions. The petitioner had been exporting services to FKDG since 2011, and this was previously recognized by the Assistant Commissioner in an order dated 29.07.2016. The court noted that the revenue could not adopt an inconsistent stand in subsequent assessments without any material change in facts or law. Compliance with Procedural Requirements: The court emphasized that issuing a show cause notice and granting an opportunity for a hearing before rejecting any refund claim is a statutory requirement. The respondents' failure to issue show cause notices for five of the eight claims rendered the rejection of these claims invalid. Conclusion: The court allowed the petition, setting aside the orders dated 13.09.2019 and 04.03.2021. The petitioner was entitled to a refund for the period from July 2017 to March 2019. The respondents were directed to release the refund amount within four weeks.
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