High Court held the services provided by E&Y Ltd. (Indian Branch) to foreign EY entities as export of services and not intermediary services.

GST refund allowed.

Facts:

1. The petitioner is an Indian Branch Office of M/s Ernst & Young Limited, a company incorporated under the laws of United Kingdom (hereafter ‘E&Y Limited’). 

2. E&Y Limited has entered into service agreements for providing professional consultancy service to various entities of Ernst & Young group (hereafter ‘EY Entities’) including Ernst & Young US LLP (hereafter ‘EY US’), Ernst & Young Service Pty Ltd. Australia (hereafter ‘EY Australia’), Ernst & Young Group Ltd. New Zealand (hereafter ‘EY NZ’) and Ernst & Young LLP, UK (hereafter ‘EY UK’) on arm’s length basis.

3. In terms of the service agreements, the overseas entities had retained E&Y Limited, acting through its Indian Branch (the petitioner) to provide certain professional services.

4. The Adjudicating Authority had denied refund of ITC on the premise that the petitioner is an ‘intermediary’ and thus, the place of services is located in India, where the petitioner’s place of business is located and not where recipient of services is located.

Authority:

Insofar as the question whether the petitioner had exported services, the Adjudicating Authority found the answer in negative.

Insofar as the place of supply of services is concerned, the Adjudicating Authority held that, in terms of Section 13(8)(b) of the IGST Act, the location of supply of intermediary services is the location of the supplier of those services.

The Adjudicating Authority proceeded on the basis that the Services provided by the petitioner were intermediary services and since the petitioner was located in India, the place of supply of the Services was not the location of the recipients of the Services but the petitioner’s location in India.

The Adjudicating Authority also referred to the letter dated 04.04.2008 issued by the Reserve Bank of India granting Ernst & Young Limited the permission to establish a Branch Office in India and noted that the activities that could be carried out by the Branch Office in India included “representing the parent company in India and acting as buying/selling agent in India”. 

Held by High Court:

:

Import or Export

:

Refund

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