TMI Blog2022 (7) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (b) starts with the words service supplied to an individual - in the instant case the said services were supplied to FTO and not to an individual. The FTO had supplied services to their subscriber (individual). Here, the supplier of services is Vodafone Idea Ltd and the recipient of the service is FTO as discussed above. Further, Vodafone Idea Ltd has no idea of subscribers of FTO and therefore question of supplying service to an individual (subscribers) does not arise. Vodafone Idea Ltd had issued invoices to FTO and not to any individual which substantiates that services were not provided to an individual. Vodafone Idea Limited has provided services to FTOs and not to the individual subscribers of FTOs. Therefore Section 13(3)(b) is not attracted. Section 13(3)(b) on which reliance has been placed by the Deputy Commissioner is not applicable. Place of supply of services - HELD THAT:- As per Section 13(2) of the IGST, the place of supply of services, except the services specified in sub-sections (3) to (13), shall be the location of the recipient of services - Vodafone Idea Limited has not supplied services specified in sub-sections (3) to (13) of Section 13. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance has been placed by the Joint Commissioner (Appeals) while allowing the appeals of Vodafone Idea Limited, have been challenged before this Court and Hon ble Supreme Court of India and therefore the questions of law on the said issue are still open. In fairness, Mr. Mishra states that there is no stay granted in any of the orders and there is no fetter in entertaining and considering these two petitions before us. 6. Mr. Mishra submitted that order-in-original passed on 19.07.2021 by the Deputy Commissioner of Central GST Central Excise Commissionerate was correct and the appellate authority was not correct. We have considered the said order-in-original passed on 19.07.2021 by the Deputy Commissioner of CGST Central Excise Commissionerate and also the order in appeal dated 18.08.2021 passed by the Joint Commissioner (Appeals) and in our view the order passed in appeal by the Joint Commissioner (Appeals) is the correct order. 7. It is the case of Vodafone Idea Limited that under the telecommunication license received from Government of India, it provides telecom services. Vodafone Idea Limited provides, inter-alia, the services in the nature of international Inbound R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of Maharashtra and cannot be considered as export of services. Further, an amount of Rs.29,98,63,922/- for the period April 2019 to June 2019 was rejected on the ground that the same was filed beyond the period of two years from the date of receipt of consideration in foreign currency. 11. Aggrieved by these two orders, Vodafone Idea Limited filed the said appeals before the Joint Commissioner of CGST and CX (Appeals). The Joint Commissioner (Appeals), by a common order dated 18.08.2021, allowed both appeals of Vodafone Idea Limited. In view of the said order Vodafone Idea Limited claims to have become eligible for refund of Rs. 1,02,74,14,843/- alongwith appropriate interest. It is this order that revenue has impugned in its petition. 12. It is Vodafone Idea Limited s case that by virtue of the IIR and ILD services provided by it, a person traveling to a country outside of his usual place of residence (where he is a regular subscriber of a telecom service provider) wishes to use telecom services from the same service providers (who usually provide services to that person in his / her usual place of residence) with the same contact number, so that his / her connection w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of services, where the location of supplier or location of recipient is outside India, is required to be determined in terms of Section 13 of the IGST Act. It is also submitted that, under sub-section 2 of Section 13 of the IGST Act, the location of the recipients of services rendered by Vodafone Idea Limited is that of FTO. Revenue relied upon sub clause (b) of sub-Section 3 of Section 13 to submit that the services are supplied to the customer of FTO. 14. It was also submitted on behalf of Vodafone Idea Limited that the conditions prescribed under section 2(6) of the IGST are also complied with. It was also submitted that IIR and ILD Services have always been considered as export of services. 15. Mr. Shroff also submitted that if revenue's view of considering the place of supply as within taxable territory for roaming services is to be accepted, it will turn out to be counterproductive. The reasons according to Mr. Shroff are as under: 1. The outward supply considered as export of service is with payment of IGST. Therefore, if the analogy of treating roaming services as domestic (non-export) it will lead to not only no refund but no consequent demand of tax as wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia from abroad. Hence, in the light of Section 13(3)(b) of IGST, condition No. (iii) of Section 2(6) of IGST as the place of supply outside India has not been fulfilled. Therefore the said services cannot be treated as export of services. Mr.Mishra was candid to admit that payment for such service was received by Vodafone India Limited in convertible foreign exchange. 18. It will be useful to reproduce the relevant provisions which read as under:- Section 2(6) of the IGST Act, 2017 (6) 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 India; (iii) the place of supply of service is outside India; (iv) the payment for 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 service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; Section 13 of the IGST Act, 2017 SECTION 13. Place of supply of services where location of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. (2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. (3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely: (a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or (b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder. Section 20 of IGST Act, 2017 SECTION 20. Application of provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be fifty crore rupees and one hundred crore rupees respectively. ] Section 2(110) of the CGST Act, 2017 (110) telecommunication service means service of any description (including electronic mail, voice mail, data services, audio text services, video text services, radio paging and cellular mobile telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature, by wire, radio, visual or other electromagnetic means. Section 2(93) of the CGST Act, 2017 (93) recipient of supply of goods and/or services means- (a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration, (b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available, and (c) where no consideration is payable for the supply of a service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices as the location where the services are actually performed. The provision of section 13(3)(b) is applicable in the case where services are supplied to an individual as Section 13(3) (b) starts with the words service supplied to an individual . We find that in the instant case the said services were supplied to FTO and not to an individual. The FTO had supplied services to their subscriber (individual). Here, the supplier of services is Vodafone Idea Ltd and the recipient of the service is FTO as discussed above. Further, Vodafone Idea Ltd has no idea of subscribers of FTO and therefore question of supplying service to an individual (subscribers) does not arise. Vodafone Idea Ltd had issued invoices to FTO and not to any individual which substantiates that services were not provided to an individual. 21. We would agree with the concept that customer's customer cannot be your customer. In the case at hand customer of Vodafone Idea Limited is the FTO and the subscribers of FTO are the customers of FTO. When a service is rendered to a third party customer of FTO your customer, the service recipient is your customer and not the third party customer of FTO. These issues have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a recipient located outside India at the time of provision of such service. The additional conditions required to be satisfied are such services as are provided from India and used outside India; and consideration for the service rendered is received in convertible foreign exchange. As observed earlier, the service is rendered to a foreign telecom service provider who is located outside India and therefore, the transaction constitutes export and we hold accordingly. 5.3. The Board s clarification vide Circular No. 111/5/2009-S.T., dated 24-2-2009 makes this position very clear. Para 3 of the Circular which is relevant is reproduced verbatim below:- 3. It is an accepted legal principle that the law has to be read harmoniously so as to avoid contradictions within a legislation. Keeping this principle in view, the meaning of the term used outside India has to be understood in the context of the characteristics of a particular category of service as mentioned in sub-rule (1) of rule 3. For example, under Architect service (a category I service [Rule 3(1)(i)]), even if an Indian architect prepares a design sitting in India for a property located in U.K. and hands it ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Western Union who is the recipient and consumer of this service provided by their Agents and sub-agents, not the persons receiving money in India. The ratio of the said decision applies squarely to the facts of the present case before us. Once the ratio is applied, it can be easily seen that the service recipient is the foreign telecom service provider and not the subscriber of the foreign telecom service provider who is roaming in India. 2. CST v Bayer Material Science (2015) 38 STR 1206 (Tri-Mumbai) (para 7) 7. A similar issue came up before this Tribunal in the case of Vodafone Essar Cellular Ltd v. CCE, Pune-III - 2012(31) S.T.R. 738 wherein it was held that the telecom service provided in India to international inbound roamers registered with foreign telecom network operator, payment received from impugned foreign telecom operators in convertible foreign exchange, in that set of facts this Tribunal has held that the service have been provided outside India as an export of service. In this case, the respondent is in a better footing that in the case of Vodafone Essar Cellular Ltd. (supra) wherein it was held that the service recipient is the foreign telecom servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider that the service is delivered only to the Singapore Company. The recipient of the service is a Singapore Company. When the recipient of the service is Singapore Company, it cannot be said that service is delivered in India and the benefit of the service is derived only by the recipient company. Because of the booking of the orders, the Singapore Company gets business. Therefore, the service is also utilized abroad. In terms of Rule 3(2) of the Export of Services Rules, 2005 the service rendered is indeed a service, which has been exported. In such circumstances, the appellant is not required to pay the service tax. There is absolutely no merit in the impugned order. Hence, we allow the appeal with consequential relief. 22. In our opinion, therefore Vodafone Idea Limited has provided services to FTOs and not to the individual subscribers of FTOs. Therefore Section 13(3)(b) is not attracted. Section 13(3)(b) on which reliance has been placed by the Deputy Commissioner is not applicable. 23. As per Section 13(2) of the IGST, the place of supply of services, except the services specified in sub-sections (3) to (13), shall be the location of the recipient of services. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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