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2025 (5) TMI 729 - HC - GSTRefund of IGST - Intermediary u/s 13 (8) read with Section 2 (13) of the Integrated Goods and Services Tax Act 2017 - HELD THAT - In identical facts and circumstances in the Petitioner s own case the CESTAT in 2021 (10) TMI 1174 - CESTAT NEW DELHI has given a categorical finding that the Petitioner is not an intermediary. While an attempt has been made to differentiate the CESTAT Order on the basis that the agreement examined by CESTAT was a different agreement it is found that it is only due to periodical renewal of the agreement the reference of the agreement differs whereas the scope of the services remained the same. Since the CESTAT order has now attained finality there are no reason to take a different view in the present case. Also there are force in the submissions of the counsel for the Petitioner that the issue is squarely covered by the CBIC Circular dated 20.09.2021 in as much as it is clarified that the provisions of law for intermediary under the service tax regime and the GST regime broadly remain the same. In view of the above the Respondents cannot be now allowed to take a different view. Conclusion - The Petitioner is not an intermediary and is entitled to a refund as claimed by them - the matter remanded back to the adjudicating authority for processing the refund claim in terms of this order along with applicable interest within a period of 4 weeks from the date of uploading of this order. Petition disposed off by way of remand.
1. ISSUES PRESENTED and CONSIDERED
The primary legal question considered by the Court was whether the Petitioners qualify as an "intermediary" under Section 13(8) read with Section 2(13) of the Integrated Goods and Services Tax Act, 2017 ("IGST Act"). This determination was pivotal because it affected the entitlement of the Petitioners to claim refunds of Integrated GST (IGST) paid on services supplied to a foreign entity, IDP Australia, which were treated as exports of services under Section 2(6) of the IGST Act. The petitions challenged the rejection of refund claims for IGST paid during two distinct periods: March 2019 to April 2020 and April 2020 to March 2021. Additional related issues included:
2. ISSUE-WISE DETAILED ANALYSIS Issue: Whether the Petitioners qualify as "intermediary" under the IGST Act. Relevant legal framework and precedents: The definition of "intermediary" under Section 2(13) of the IGST Act is central to the analysis. The term is defined as a person who arranges or facilitates the supply of goods or services between two or more persons but does not include a person who supplies such goods or services on his own account. The CBIC Circular No. 159/15/2021-GST explicitly states that the concept of "intermediary" under GST is broadly the same as under the Service Tax regime, thereby invoking precedents and interpretations from the earlier tax regime. The CESTAT's Final Order dated 28th October 2021, which considered the same factual matrix for the period April 2014 to September 2015, held that the Petitioner was not an intermediary. This order attained finality after the challenge before the Delhi High Court was dismissed for delay. Court's interpretation and reasoning: The Court examined the nature of the contractual relationship between the Petitioners and IDP Australia. The Petitioner was found to have no direct contractual obligation with either the foreign universities or the students. Instead, the Petitioner provided support services to IDP Australia under a Support Services Agreement, receiving a percentage of fees from IDP Australia. The Court noted that the Petitioner rendered services on a principal-to-principal basis under a bipartite contract. The Court also considered the CBIC Circular clarifying that the scope of "intermediary" under GST remains consistent with the Service Tax regime, under which the CESTAT had ruled in favor of the Petitioner. The Court rejected the Respondents' attempt to distinguish the CESTAT order on the basis of a different agreement, observing that the differences were only due to periodic renewal of the agreement, with the scope of services remaining unchanged. Key evidence and findings: The contractual documents, the nature of services rendered, the absence of any direct contractual relationship with the universities or students, and the prior CESTAT order were critical pieces of evidence. The CBIC Circular provided authoritative guidance on the interpretation of "intermediary." Application of law to facts: Applying the legal definitions and precedents to the facts, the Court concluded that the Petitioners did not fall within the definition of "intermediary." The services rendered were not facilitative or arranging in nature but were principal-to-principal support services. Therefore, the Petitioners' claim for refund of IGST paid on export of services was valid. Treatment of competing arguments: The Respondents argued that the Petitioners were intermediaries based on findings in the impugned order. However, the Court found these arguments unpersuasive, given the binding nature of the CESTAT order and the CBIC Circular. The Respondents' attempt to differentiate the agreements was dismissed as a mere technicality without substantive impact on the nature of services. Conclusions: The Court held that the Petitioners are not intermediaries under the IGST Act and are entitled to the refund claimed. The matter was remanded to the adjudicating authority for processing the refund claim with applicable interest within four weeks. 3. SIGNIFICANT HOLDINGS The Court's crucial legal reasoning included the following verbatim observation: "Since the CESTAT order has now attained finality, we see no reason to take a different view in the present case. Also, we find force in the submissions of the counsel for the Petitioner that the issue is squarely covered by the CBIC Circular dated 20.09.2021, in as much as it is clarified that the provisions of law for intermediary under the service tax regime and the GST regime broadly remain the same. In view of the above, the Respondents cannot be now allowed to take a different view." The core principles established are:
Final determinations on the issue were:
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