The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), granted relief to Singtel India, thereby dismissing service tax appeals holding M/s. SingTel Global India Private Limited (SGIPL), the appellant is not intermediary.
The issue involved in all these appeals is regarding the refund claimed by SGIPL under rule 5 of the CENVAT Credit Rules 2004 read with the Place of Provision of Service Rules 2012 of the unutilized input service credit of input services used by SGIPL to export telecommunication services to Singapore Telecommunications Ltd. (SingTel, located in Singapore) in terms of the contract. The dispute relates to the refund claims filed by SGIPL under rule 5 of the 2004 Credit Rules.
An agreement was entered into between SingTel and SGIPL. An intermediary is a person who arranges or facilitates provision of the main service between two or more persons. SGIPL is not involved in the arrangement or facilitation of the supply of service. In fact, it has entered into two Agreements; one with SingTel and the other with the Indian telecommunication service providers.
SingTel had entered into Agreements with end customers for providing telecommunication services and it is for the provision of this telecommunication services that SingTel entered into an Agreement with SGIPL on a principal to principal basis.
SGIPL entered into agreements with the Indian telecommunication service providers for providing bandwidth so as to enable it to provide the required services to SingTel for its customers. Thus, the two Agreements are distinct and independent from each other. SGIPL provides the main service i.e. telecommunication service to SingTel on its own account.
The telecommunication service provided by SGIPL qualify for export since it is providing telecommunication services to SingTel which is outside India and is receiving convertible foreign exchange for such services. SGIPL is not a privy to the Agreement entered into between SingTel and its end customers. Merely because SGIPL is charging handling fee on SingTel would not mean it is an intermediary.
Dismissing the three service tax appeals filed by the department a Bench consisting of Justice Dilip Gupta, President and P V Subba Rao, Technical Member held that “The Commissioner (Appeals) correctly appreciated the position in the orders in holding that SGIPL was not intermediary and had provided export of service to SingTel.”
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