In a recent ruling, the Punjab and Haryana High Court has held that the Genpact India cannot be treated as an “intermediary” and therefore allowed a refund of Rs.26,34,61,625/- in favor of the Company.
The petitioner challenged an order of the GST department wherein it has been held that the services provided by the petitioner are in the nature of “Intermediary Services” as per Section 2 (13) of the IGST Act and do not qualify as “export of services” in terms of Section 2 (6) of the Act and thereby rejecting the refund claim of un-utilized Input Tax Credit (ITC) used in making zero rated supplies of services without payment of Integrated Goods and Service Tax.
A division bench comprising Justice Tejinder Singh Dhindsa and Justice Deepak Manchanda observed that the MSA dated 01.01.2013 (Annexure P-1) entered between the petitioner and GI is clearly for the purpose of sub-contracting services to the petitioner by GI. These are the very services which GI was contractually supposed to provide to its own customers.
“A bare perusal of the recitals and relevant clauses of the MSA reproduced hereinabove do not in any manner indicate that petitioner is acting as an “intermediary” so as to fall within the scope and ambit of the definition of “intermediary” under Section 2 (13) of the IGST Act. Such clauses cannot also be interpreted to conclude that the petitioner has facilitated the services. The said clauses are in relation to the modalities of how the actual work would be carried out and do not in any manner establish that the petitioner was required to arrange/facilitate a 3rd party to render the main service which has actually been rendered by the petitioner,” the Court observed.
Allowing relief to the assessee, the Court held that the services provided by the petitioner are in the nature of “Intermediary Services” as per Section 2 (13) of the IGST Act and do not qualify as “export of services” in terms of Section 2 (6) of the Act and thereby rejected the refund claim of un-utilized Input Tax Credit (ITC) used in making zero rated supplies of services without payment of IGST.
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