"Intermediary Services"

"Intermediary Services" has always been the subject matter of dispute between the Taxpayer and the Revenue. Here are some relevant judgments.

Thoughts, Insight and Research by: Abhishek Raja Ram, 9810638155

1. Material Recycling Association of India - Gujarat High Court

(2020) 81 GST 164

The place of supply for intermediaries is where the service is supplied. Section 13(8)(b) is neither ultra vires nor unconstitutional.

This artificial distinction, treating intermediary services differently when the final recipient is outside India, undermines GST's principle as a destination-based consumption tax.

2. Ernst & Young Ltd. - Delhi High Court

(2023) 73 GSTL 161

Where assessee was directly providing professional services and was not facilitating or arranging such services between overseas entity and third party, professional services provided to overseas entity did not amount to intermediary services.

3. Boks Business Services Pvt. Ltd. - Delhi High Court

(2023) 100 GST 254

Where assessee, engaged in business of book keeping, payroll maintenance and accounting services through use of cloud technology had provided said services to its affiliated entity incorporated in United Kingdom, assessee's claim for refund of unutilized input tax credit in respect of zero rated supplies was to be processed because assessee acted as a principal service provider and not as agent or intermediary.

4. BlackRock Services India Pvt. Ltd. - CESTAT Chandigarh

(2022) 67 GSTL 447 :: (2022) 142 taxmann com 208

The adjudicating authority rejected the appellants' refund claim, arguing that their IT support for HLX was "intermediary service" with the provision location in India.

However, no evidence showed the appellants acted as intermediaries between HLX and its clients. According to rule 3, the service provision location was outside India, qualifying as an export service. The authority must process the cenvat credit refund within three months.

5. Analog Devices India Pvt. Ltd. - CESTAT Bangalore

(2019) 107 taxmann com 144

Where assessee, a subsidiary of Analog Devices Holdings BV, Netherlands, which in turn was a subsidiary of Analog Devices International, was engaged in exporting taxable services viz. consulting engineering service and business auxiliary service to its holding company, assessee was not rendering intermediary service.

Hope you will find this useful.

Thanks

Abhishek Raja Ram

9810638155