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TMI BlogAgreement stating Agent, need not be Intermediary – Refund allowedX X X X Extracts X X X X X X X X Extracts X X X X ..... Agreement stating Agent, need not be Intermediary – Refund allowed - By: - CA Bimal Jain - Goods and Services Tax - GST - Dated:- 6-10-2023 - The Hon ble Delhi High Court in BOKS BUSINESS SERVICES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL GOODS AND SERVICES TAX DELHI SOUTH AND ANR. - 2023 (9) TMI 230 - DELHI HIGH COURT held that even when a assessee is referred to as an agent in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement, doesn t concretely mean that the he is an intermediatory and not a principal service provider. As a result, the denial of the refund was overturned, and the tax authorities were instructed to process the refund claim expeditiously. Facts: BOKS Business Services Pvt Ltd ( the Petitioner ), specializes in providing bookkeeping, payroll, and accounting services through cloud te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chnology to its affiliated entity in the United Kingdom, previously known as Boks Business Services Limited. The Petitioner sought a refund for unutilized input tax credit related to zero-rated supplies under the Integrated Goods and Services Tax Act, 2017 ( the IGST Act ) for the tax periods spanning from April 2018 to March 2019 and April 2019 to December 2019, following the necessary proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edure by submitting Form RFD 01. The tax authorities ( the Respondent ) initially raised concerns regarding the nature of services provided by the Petitioner. They suggested that these services fall under the category of intermediary services, thereby implying that the place of service delivery was within India. The tax authorities issued a show cause notice dated 24.06.2020, indicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng their intention to reject the refund claim. The Petitioner responded to the show cause notice by explaining the nature of its services, but the explanation was not accepted. Consequently, the claims for refund were rejected in orders dated July 23, 2020, with the authorities categorizing the Petitioner as an intermediary under Section 2(13) of the IGST Act. The Petitioner appealed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese decisions to the Appellate Authority. The Petitioner contended that they should not be considered as an intermediary under the IGST Act . They contended that their role was not that of facilitating third-party services or acting as intermediaries in procuring services for their affiliate. Instead, they asserted that they had been contracted directly to provide services, making them the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principal service providers for bookkeeping, payroll, and accounting services via cloud technology Issue: Whether the Petitioner can be considered as an intermediary within the meaning of Section 2(13) of the IGST Act in the context of the services rendered by it? Held The Hon ble Delhi High Court in BOKS BUSINESS SERVICES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL GOODS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AND SERVICES TAX DELHI SOUTH AND ANR. - 2023 (9) TMI 230 - DELHI HIGH COURT held as under: The Petitioner could not be classified as an intermediary under the IGST Act . The Petitioner s services included bookkeeping, payroll, and accounting services using cloud technology. Noted that in the case of intermediary services, there are typically three entities involved: one provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the principal service, one receiving the principal service, and an intermediary acting as an agent or broker to facilitate or arrange such services for the recipient. Further noted that the agreement between the Petitioner and its foreign affiliate, Boks Business Services Limited, did use the term agent, but it was clear that the Petitioner was not acting as an agent to procure services f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the service recipient. Since, the agreement clearly stated that the Petitioner was engaged to provide the principal services, and it was the principal service provider for bookkeeping, payroll, and accounts through the use of cloud technology. Held that merely because the services were for the clients of the Petitioner s affiliate did not make the Petitioner an intermediary as per the IGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Subsequently, the Court relied on relevant decisions, including M/S. ERNST AND YOUNG LIMITED VERSUS ADDITIONAL COMMISSIONER, CGST APPEALS -II, DELHI AND ANR. - 2023 (3) TMI 1117 - DELHI HIGH COURT and M/S. CUBE HIGHWAYS AND TRANSPORTATION ASSETS ADVISOR PRIVATE LIMITED VERSUS ASSISTANT COMMISSIONER CGST DIVISION ORS. - 2023 (8) TMI 980 - DELHI HIGH COURT , to support its conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. Set aside the impugned orders that had rejected the Petitioner s claim for a refund of unutilized input tax credit. Held that the Respondent are directed and bound to process the Petitioner s claim for a refund expeditiously, preferably within four weeks from the date of the judgment i.e. August 22, 2023. Relevant Provision: Section 2(13) of the CGST Act Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (13) intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account; Author can be reached at [email protected] ) - Scholarly articles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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