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TMI Blog2025 (1) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... he scope of services to be provided by the petitioner, it cannot be said that the petitioner is only to work as an agent or a broker between parent company and its customers without supplying any goods or services on its own account. Moreover, on terms of payment, payment is to be received by the petitioner from its parent company on monthly basis and fee equal to cost incurred by the petitioner plus 8% mark up on costs. Meaning thereby, the petitioner is also earning the profit of 8% on the cost incurred by it in providing services to its parent company. In view of the terms of the agreement executed between the petitioner and its parent company, it cannot be said that the petitioner was not exporting services but was working as an intermediary for its parent company. The petitioner is an independent company incorporated in India having distinct entity and in such circumstances, the service provided by the petitioner to its parent company was in independent capacity and not in the capacity of either agent or broker or any other person. The Delhi High Court in case of M/S. ERNST AND YOUNG LIMITED VERSUS ADDITIONAL COMMISSIONER, CGST APPEALS -II, DELHI AND ANR. [ 2023 (3) TMI 1117 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company providing information services and consultancy in the business of software development, editorial services and IT services. (v) It is the case of the petitioner that in pursuance of the services agreement, the parent company raises its requirements and queries which are assigned to the petitioner in form of JIRA tickets which is a software application and a service desk platform. The JIRA tickets have a detailed description of the kind of service required by InfoDesk. Inc. from the petitioner. It is the case of the petitioner that it has hired employees for providing these Software Consultancy Services to its parent company which provides remuneration to these employees in exchange of these services. The employees of the petitioner are assigned with the task of methodically engaging with the raised queries of parent company on the common platform of JIRA tickets. (vi) The petitioner has also regularly raised tax invoices for providing software consultancy services to its parent company and for providing such services, the petitioner had received various inputs and input services and availed Input Tax Credit (ITC) on the aforesaid inputs and input services. (vii) According t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of demand in Form GST APL-04 was issued. (xiii) As the Appellate Tribunal in terms of Section 110 of CGST Act is not available, the petitioner has challenged the order passed by the Appellate Authority by preferring these petitions. 4. Learned advocate Mr. Anand Nainawati for the petitioner submitted that the petitioner is in the business of providing services to its parent company on principal to principal basis and therefore, the same cannot be considered as intermediary service as per Section 2(13) of the IGST Act. By referring to definition of intermediary service as provided in Section 2(13) of the IGST Act, it was submitted that the petitioner is neither a broker, an agent or any other person, who is responsible for arranging or facilitating the supply of services between two or more persons, but, on the contrary, the petitioner is providing services to its own parent company on its own account. Reliance was also placed on Circular No.159/15/2021-GST dated 20th September 2021 issued by CBITC. 5. It was submitted by learned advocate Mr. Anand Nainawati for the petitioner that as per the terms of the service agreement between the petitioner and its parent company, more particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portal and the amount claimed as refund shall get debited in accordance with Rule 89(3) of the CGST Rules from the amount in the electronic credit ledger to the extent of the claim. The said circular lays down the procedure to file an application physically. 5.5 The total case of the respondents is thus that since the physical submission of the application along with documents was on 17.10.2019, it was beyond the period of two years and therefore time barred, counted from the relevant date. 5.6 Now, it is not in dispute that the petitioners filed their refund application in the common portal on 28.12.2018 and ARN was generated. Until the application with documents were physically submitted on 17.10.2019, the respondents did not do anything on the application, which was filed as per the mechanism adopted by the respondents, on 28.12.2018. It is not in dispute that the refund claim of the petitioner otherwise satisfied all requirements of Section 54 of the CGST Act and the attendant Rules and the petitioner was eligible to seek refund. The refund claim was however considered as time barred stating that the application was liable to be treated to have been filed on 17.10.2019 and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim by considering supply of service to its parent company to its intermediary, it was submitted that the petitioner has provided the service on principal to principal basis to its parent company as per the terms of the service agreement and therefore, the provision of Section 2(13) of the IGST Act would not be applicable so as to levy the GST on the services provided to the petitioner to its parent company. 12. In support of his submission, reliance was placed on the decision of the Punjab and Haryana High Court in case of Genpact India Pvt. Ltd. vs. Union of India and others, reported in 2022 (11) TMI 743 and the decision of the Delhi High Court in case of M/s. Ohmi Industries Asia Private Limited vs. Assistant Commissioner, CGST, reported in 2023 (4) TMI 425. He has also referred the relied upon the decision of the Delhi High Court in case of M/s. Ernst and Young Limited vs. Additional Commissioner, CGST Appeals-II, Delhi and another, reported in 2023 (3) TMI 1117. 13. On the other hand, learned advocate Mr. Param Shah made only one line submission that the petitioner is working as an intermediary for hiring export of service for the benefit of its parent company. 14. Having hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/principals for the above mentioned activities. 1.1.2 To assist the US entity with consultancy related to designing and developing programs with documentation, material sample files, system analysis and design word processing for problems related to technical operations, administration etc. 4.2 Party B shall submit to Party A a monthly invoice, in a form that details work completed during the previous month for such Services Fee incurred in the previous period. Party A shall pay to Party B the amounts shown on each such invoice within thirty (30) days after receipt thereof. Party A shall pay Party B, fee equal to cost incurred by Party B in running its operations plus eight (8)% mark up on costs. 4.4 The Services Fee stipulated in Article 4.2 shall be the full amount that Party A shall pay Party B for its Services, and Party B shall not charge for any other payments, reimbursement, charges or taxes from Party A except the Services Fee stipulated in Article 4.1. All costs, payment, charges, taxes arising from the Services shall be for Party B own account, including but not limited to transportation fee, communications fee, accommodation fee, catering fee, salary, transportation fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settled amicably through friendly negotiation. In case no settlement of the dispute can be reached through negotiation, the case in dispute shall then be submitted to India International Economic and Trade Arbitration Commission, South India Sub-Commission for arbitration in accordance with the Rules of Arbitration of India International Economic and Trade Arbitration Commission in effect at the time of applying for arbitration. The arbitration tribunal shall take place in India. The arbitral award is final and binding upon the Parties. 18. In view of the above terms of the agreement executed between the petitioner and its parent company, it cannot be said that the petitioner was not exporting services but was working as an intermediary for its parent company. The petitioner is an independent company incorporated in India having distinct entity and in such circumstances, the service provided by the petitioner to its parent company was in independent capacity and not in the capacity of either agent or broker or any other person. 19. The Delhi High Court in case of M/s. Ernst and Young Limited vs. Additional Commissioner, CGST Appeals-II, Delhi and another, reported in 2023 (3) TMI 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ediary was borrowed in GST from the Service Tax Regime. The circular after making a reference to the definition 35 of 42 of intermediary both under Rule 2 (f) of the Place of Provision of Service Rules 2012 and under Section 2 (13) of the IGST Act clearly states that there is broadly no change in the scope of intermediary services in the GST regime vis-a-vis the service tax regime except addition of supply of securities in the definition of intermediary in the GST law. We also find that in the impugned order dated 15.02.2021 (Annexure P-18) there has been a clear misreading of the ruling in the case of Infinera (supra) while observing that there has been a material change in the definition of intermediary under the GST regime. To the contrary a bare perusal of the ruling in the case of Infinera (Supra) which stands reproduced by the Appellate Authority in the impugned order itself would show that the definition of the term intermediary had been noticed both under the pre-GST regime as also under the GST regime and it had been observed as under:- From the above definitions, in essence, there does not seem to be any difference between the meaning of the term intermediary under the GS ..... X X X X Extracts X X X X X X X X Extracts X X X X
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