TMI Blog2022 (6) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... nnection with production services. Petitioner is a service provider and ASCL is the service recipient. This court relying on the Apex court judgment in MAFATLAL INDUSTRIES LTD. VERSUS UNION OF INDIA [ 1996 (12) TMI 50 - SUPREME COURT ] held that when services are rendered abroad, CGST will not apply - In the case at hand also, the petitioner has rendered services to the ASCL abroad i.e. in U.K. Therefore, GST does not apply to the services rendered abroad as they amount to the export of services. In addition to that the respondent could not establish that the incident of tax has been passed on to the recipient ASCL located in London. Thus, both, the Adjudicating Authority and the Appellate Authority committed error in rejecting the refund of GST of the petitioner. Therefore, orders of both the authorities cannot be sustained and need to be set aside. Petition allowed - decided in favor of petitioner. - WRIT PETITION NO.1143 OF 2021 - - - Dated:- 9-6-2022 - S.V. GANGAPURWALA M.G. SEWLIKAR, JJ. Mr. Prasad Paranjape a/w Mohit Raval i/b Lumiere Law Partners for the Petitioner. Mr. Pradeep Jetly, Senior Advcate, for Respondents. JUDGMENT : (PER : M.G.SEWLIKAR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by this order, the petitioner preferred an Appeal to Respondent No 3. After hearing the Petitioner, Respondent No.3 dismissed the Appeal of the Petitioner vide Order-in-Appeal no APK/GST/AIII/ ADC/MUM/54/2021 dated 19/02/2021 holding that the incidence of tax has passed on to the client i.e. ASCL and that it amounted to unjust enrichment. The Appellate Authority held that the burden of the GST has been shifted to the service recipient, the petitioner cannot be a beneficiary, as any refund to the petitioner would amount to unjust enrichment. The Appellate Authority placed reliance on the Constitution Bench judgment of the Supreme Court in the case of Mafatlal Industries vs Union of India (1997) 5 SCC 536. 8] It is further alleged that the petitioner filed GST claim of Rs. 5,79,25,012/- for the period from November, 2019 to July 2020 on 1st September 2020. On 21st September, 2020, respondent no 4 issued SCN to the petitioner. Identical objections as raised in SCN dated 27th July, 2020, were also raised in the SCN dated 21st September, 2020. The Petitioner replied to this notice. After hearing the Petitioner, Respondent No. 4 rejected the claim of refund of the GST on the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Petitioner is not entitled to claim refund. It is not in dispute that the Petitioner provides production services to the ASCL. Therefore, this clearly demonstrates that the Petitioner is exporting the services to the ASCL. Section 2(6) of Integrated Goods And Services Tax Act defines export services thus:- Export of services means the supply of any service when- (i) the supplier of service is located in India (ii) the recipient of service is located outside of India (iii) the place of supply of service is outside of India (iv) the payment of such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India and (v) the supplier of service and the recipient of the service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8. 14] The Petitioner has placed on record a copy of the agreement. It shows that the ASCL is located outside of India and the petitioner company is located in India. And the production services are rendered by the petitioner in the U.K. It is, thus, clear that the services rendered by the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of Indian Goods and Services Tax Act. This shows that GST is included in all costs in connection with production services. Petitioner is a service provider and ASCL is the service recipient. 20] Clause 4.10 of the agreement shows that if the amount of GST is refunded , then the same will be deducted from the total cost in connection with the production services. This clearly shows that the incidence of tax has not been passed to the recipient ASCL. Respondent No. 3 has treated alternative argument of the petitioner as admission. It was contended by the petitioner before Respondent no 3 that without admitting that the incidence of tax has passed on, credit notes were issued for the value of GST , the incidence of tax cannot be transferred. This alternative argument cannot be treated as an admission. 21] Moreover, in the case of Motilal Oswal Securities Ltd vs Commissioner of Service Tax 2016 (12) TMI 1527 relied on by the petitioner similar issue was involved. This court held thus:- 6. We find that both the lower authorities have totally erred in rejecting the refund claim filed by the appellant. It is undisputed that the services rendered by the appellant for Inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the respondent located abroad engaged the services of the respondent for inspection and testing the goods. The goods were tested by the respondents in India. The goods were available or their samples were drawn for such testing and analysis in India. However, the report of such test and analysis was sent abroad. The clients of the respondent were foreign clients, paid the respondent for such services rendered, in foreign convertible currency. It is in the sense that the Tribunal holds that the benefit of the services occurred to the foreign clients outside India. This is termed as export of service. In the circumstances, the Tribunal takes a view that if services were rendered to such foreign clients located abroad, then, the act can be termed as export of service. Such an act does not invite a Service Tax liability. The Tribunal relied upon the circulars issued and prior thereto the view taken by it in the case of KSH International Pvt. Ltd. v. Commissioner B.A. Research India Ltd. The case of the present respondent was said to be covered by orders in these two cases. To our mind, once the Hon ble Supreme Court has taken the view that Service Tax is a value added tax which i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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