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TMI Blog2023 (8) TMI 1264X X X X Extracts X X X X X X X X Extracts X X X X ..... of the tax paid by the petitioner. 3. The question which falls for determination is as to whether the services rendered by the petitioner of providing Satellite derived 3D model services, would fall within the purview of "export of services" as defined under Section 2(6) of the IGST Act or would be categorized as Online Information Database Access or Retrieval services as defined under Section 2(17) of the IGST Act, in the context of Section 13 of the IGST Act. 4. The relevant facts as averred in the petition are:- The petitioner isa company incorporated under the Companies Act, 1956. The petitioner entered into a Service Agreement dated 09 September, 2019 with M/s. Emirates Defence Industries Co. PJSC, which was inter-alia in regard to providing of service of production of 3D city models of three cities being Abudhabi, AL Ain, AL Dhafra as per the specifications provided by M/s. Emirates Defence Industries Co. PJSC. The relevant clauses of the service agreement entered between M/s. Emirates Defence Industries Co. PJSC and the petitioner are as under:- "1. SCOPE OF SERVICES: The Scope of services performed by Consultant shall include the following:- * Supply of Satellite d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hafra Final 28th November, 2019 219,666.67 Total 659,000.00 WHEREAS: (A) The Consultant is engaged in the business of providing Satellite derived 3D model services and has considerable skill, knowledge and experience in this field to perform such services. (B) In reliance upon the representations, skill, knowledge and experience of the Consultant, EDIC has agreed to engage the Consultant to provide the Services (as defined below) to EDIC and any of its Affiliates designated by EDIC in writing for this purpose, and the Consultant has agreed to accept the engagement on the terms and conditions set out in this Agreement." 5. The petitioner has contended that to provide technical service, the petitioner imported Very High Resolution (VHR) stereo satellite images from one M/s. 4 Earth Intelligence Limited. In terms of the scope of the service, the petitioner also processed and digitalized the satellite images. After processing, the 3D city models were sent to Abu Dhabi Digital Authority (ADDA) via file transfer protocol. The petitioner has also placed on record a copy of invoice raised by M/s. 4-Earth Intelligence Limited. The petitioner conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file an appeal along with the copies of relevant documents before the appellate authority for the determination of following points:- "(a) Whether the services supplied by the respondent are export of services in terms of provisions of Section 2(6) of the IGST Act, 2017, or not. (b) Whether, after taking into consideration the facts and circumstances of the case, the said order of Deputy Commissioner, Division - II, CGST & CX, Mumbai South is legal and proper. (c) Whether the refund erroneously granted by the Adjudicating Authority needs to be recovered alongwith due interest. (d) Any other order so deemed appropriate by Appellate Authority." 10. In pursuance of the review order dated 26 August, 2021 passed by the Assistant Commissioner, respondent no. 2 filed a GST appeal before the appellate authority, namely, the Joint Commissioner, CGST & CX (Appeals-I), Mumbai-respondent no. 3 against the refund sanction order passed in favour of the petitioner. The petitioner also filed a detailed cross objection/reply to the above appeal. 11. In the appeal, the department placing reliance on the provisions of the IGST Act and more particularly the definition of "export of services" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that the nature of the services provided by the petitioner were ascertained and the same were related to IT Services of 3D model creation falling within the definition of OIDAR service under Section 2(17) of the IGST Act. The affidavit states that such nature of service provided by the petitioner was also confirmed by Shri Sanket Shah, Accountant of the petitioner during his statement dated 26 July, 2021. It is contended that the agreement between the petitioner and M/s. Emirates Defense Industries Company PJSC was examined which revealed that the said agreement was for supply of satellite derived 3D city model of Abu Dhabi City by the petitioner. It is contended that as per Section 13(12) of the IGST Act, the place of supply of online information and database access or retrieval services shall be the location of the recipient of services, but subject to fulfillment of any two conditions given in the explanation to the Section 13(12) of the IGST Act, however, there was no material submitted by the petitioner evidencing that the recipient is located at non-taxable territory. It is next contended that the petitioner had provided the service of production of 3D city models a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of Abu Dhabi Emirate with particular specifications. It is submitted that the petitioner had fully complied with the requirement of Section 13(12) of the IGST Act, as also the case of the petitioner fully fell within the definition of export of service as defined under Section 2(6) of the IGST Act, whereby the petitioner complied with all the sub-clauses (i) to (iv) as falling under the said definition. Mr. Raichandani has also submitted that the location of recipient of service of the present case was a party located outside the Indian territory. Our attention is also drawn to the invoices under which the petitioner has received amounts in convertible foreign exchange, which according to him clearly indicate that the buyer of services was Emirates Defence Industries Company, Abu Dhabi entities in U.A.E. as the invoice clearly showed that the invoice value was also received in convertible foreign exchange. Mr. Raichandani would submit that the primary reason as set out by the appellate authority to allow the respondents appeal is contained in paragraph 5.7 wherein the appellate authority had observed that the FRC's produced by the petitioner showed that the remittance was made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'export of service', [Section 2(6)]; 'location of recipient of service', [Section 2(14)]; 'online information and database access or retrieval services' (OIDAR) [Section 2(17)]; and Section 13 where place of supply of service where location of supplier or location of recipient is outside India. These provisions read thus: "Section 2 - Definitions (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; (14) "location of the recipient of services" means,-- (a) where a supply is received at a place of business for which the registration has been obtained, the location of such place of business; (b) where a supply is received at a place other than the place of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services: Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs or for any other treatment or process and are exported after such repairs or treatment or process without being put to any use in India, other than that which is required for such repairs or treatment or process; (b) services supplied to an individual, represented either as the recipient of services or a person acting on behalf of the recipient, which require the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services. (4) The place of supply of services supplied directly in relation to an immovable property, including services supplied in this regard by experts and estate agents, supply of accommodation by a hotel, inn, guest house, club or campsite, by whatever name called, grant of rights to use immovable property, services for carrying out or coordination of construction work, including that of architects or inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incipal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or (iii) such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette, specify. (9) The place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods. (10) The place of supply in respect of passenger transportation services shall be the place where the passenger embarks on the conveyance for a continuous journey. (11) The place of supply of services provided on board a conveyance during the course of a passenger transport operation, including services intended to be wholly or substantially consumed while on board, shall be the first scheduled point of departure of that conveyance for the journey. (12) The place of supply of online information and database access or retrieval services shall be the location of the recipient of services. Explanation.--For the purposes of this sub-section, person receiving such services shall be deemed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the place of supply of service was agreed to be outside India, as also the payment of such services was being received by the petitioner/supplier of service in convertible foreign exchange. 22. Further, the establishment of the petitioner (supplier of service) and the recipient of service (Emirates Defence Industries Co.) were not establishments of distinct person under Explanation 1 below Section 8. The petitioner had received consideration in convertible foreign exchange as seen from the copy of invoice as placed on record in regard to which there is no dispute. It is thus clear that the petitioner certainly qualified the requirement of Section 2(6) that it was dealing in export of services in relation to the Agreement in question. 23. The next question would be as to whether the impugned order is correct when it categories the service offered by the petitioner to be online information and database access or retrieval services (OIDAR) within the meaning of Section 2(17) of the IGST Act. On a perusal of said definition, such services have been defined to mean services whose delivery is mediated by information technology over the internet or an electronic network and the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which would be freely available on the internet and / or are materials of the nature Section 2(17) would contemplate. Also undoubtedly the consideration as received by the petitioner for providing of such service is received in convertible foreign exchange, although through the foreign recipients / representative M/s. Bayanat LLP, as it is not the case of the department that such amounts as received by the petitioner are not under the Agreement in question. In fact the invoices clearly refer to the payment in US dollars to be when the contract of the petitioner with Emirates. There is no material to disbelieve the case of the petitioner for any reason whatsoever that the recipient of the service is not a foreign recipient. 26. For such reasons, in our opinion, considering the material on record, the petitioner is correct in its contention that merely because the petitioner has secured data from different source so as to create the services to be supplied to Emirates, it would not amount to the petitioner falling within the definition of Section 2(17). 27. We are thus of the opinion that the appellate authority is not correct in its conclusion that in the context of Section 13 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was not export of service so as to deny the petitioner's the referred claim. 30. In the light of the above discussion, we are certain that the petition need to succeed. It is accordingly allowed in terms of prayer clauses (a) to (c) which read thus:- "a) that this Hon'ble Court be pleased to issue a Writ of certiorari / mandamus or any other appropriate Writ / order/ direction under Article 226 of the Constitution of India calling for the records pertaining to the Petitioner case and after going into the validity and legality thereof to quash and set aside impugned order dated 31.03.2021 (Exhibit A); b) that this Hon'ble Court be pleased to issue a Writ of certiorari / mandamus or any other appropriate Writ/order/ direction under Article 226 of the Constitution of India calling for the records pertaining to the Petitioner case and after going through the facts of the Petitioner's case hold and declare that the Petitioner is entitled to refund on account of export of services; c) that this Hon'ble Court be pleased to issue a writ of mandamus or any other appropriate writ, order or direction under Article 226 of the Constitution of India ordering and directing the Respond ..... 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