A Division Bench of the Bombay High Court upheld the provisions to levy Goods and Service Tax (GST) on intermediaries.
The petitioner in the present matter is Dharmendra M. Jani. The principal challenge in the writ petitions is to the vires of Section 13(8)(b) and section 8(2) of the Integrated Goods and Services Tax Act, 2017.
Section 13(8)(b) of the IGST Act refers to intermediary services while determining the location of the supplier as the Place of Supply (PoS). Section 8(2) of the IGST Act defines intra-state supply, which states that if a supplier is in India and the recipient is located abroad, then these will be treated as establishments of distinct persons.
Justice Ujjal Bhuyan while considering one of the writ petitions held that section 13(8)(b) of the IGST Act to be ultravires and unconstitutional and Justice Abhay Ahuja had held section 13(8)(b) as well as section 8(2) of the IGST Act as constitutionally valid. Following this, the matter was referred by the Chief Justice to a Third judge, Justice GS Kulkarni.
Justice GS Kulkarni noted that “The provisions of Section 13(8)(b) and Section 8(2) of the IGST Act are legal, valid and constitutional, provided that the provisions of Section 13(8)(b) and Section 8(2) are confined in their operation to the provisions of IGST Act only and the same cannot be made applicable for levy of tax on services under the CGST and MGST Acts.”
Then, the matter was referred to a division bench for pronouncement of the final judgment so that the matter can be disposed.
The Division Bench comprising of Justice Sunil B Shukre and Justice Abhay Ahuja observed that “Considering the views taken by Justice G.S.Kulkarni and one of us (Abhay Ahuja, J.), we hold the provisions of Section 13(8)(b) and Section 8(2) of the IGST to be legal, valid and constitutional.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
