Facts of the Case

The petitioner, M/s Cube Highways and Transportation Assets Advisor Pvt. Ltd., is engaged in providing investment advisory and support services to its overseas group entity, I Squared Asia Advisors Pte. Ltd., Singapore.

  • The services included:
    • Market research and trend analysis
    • Identification of investment opportunities in India
    • Financial feasibility studies and risk analysis
    • Due diligence and advisory reports
  • The petitioner received consideration in convertible foreign exchange.
  • Under the pre-GST regime, such services were treated as export of services, and refunds were granted.
  • However, for FY 2018–19, 2019–20, and 2020–21, refund claims of unutilized Input Tax Credit (ITC) under Section 54 of the CGST Act, 2017 were rejected on the ground that:
    • The services were not export of services, and
    • The petitioner allegedly acted as an “intermediary”.

Issues Involved

  1. Whether the advisory services provided by the petitioner qualify as “export of services” under Section 2(6) of the IGST Act, 2017.
  2. Whether the petitioner is an “intermediary” under Section 2(13) of the IGST Act.
  3. Whether the place of supply is in India under:
    • Section 13(8)(b) (Intermediary services)
    • Section 13(3)(b) (services requiring physical presence)
    • Section 13(4) (services related to immovable property)
  4. Whether rejection of refund claims was legally valid. 

Petitioner’s Arguments

  • Services were provided on a principal-to-principal basis, not as an agent.
  • The petitioner did not facilitate any third-party supply, hence cannot be termed as an intermediary.
  • Services were rendered directly to a foreign entity, and consideration was received in foreign exchange.
  • As per Section 13(2) of IGST Act, the place of supply is the location of recipient (outside India).
  • The services are purely advisory in nature, not related to immovable property or requiring physical presence.
  • Pre-GST treatment accepted such services as export, and there is no material change in nature.

Respondent’s Arguments

  • The petitioner acted as a liaison/facilitator between foreign entity and Indian opportunities, thus qualifying as an intermediary.
  • The services were allegedly:
    • Connected to immovable property (roads, tolls) in India
    • Requiring physical presence, thus falling under Section 13(3)(b)
  • Therefore, place of supply is India, and services cannot be treated as export.
  • Refund claims were rightly rejected.

Court’s Findings / Judgment

The Delhi High Court held:

1. Petitioner is NOT an Intermediary

  • An intermediary requires three parties and facilitation of supply between two persons.
  • The petitioner directly provided advisory services to the foreign entity.
  • There was no facilitation or arrangement of third-party services.
  • Hence, Section 13(8)(b) is not applicable.

2. Services are NOT Covered under Section 13(3)(b)

  • This provision applies to services requiring physical presence of an individual.
  • The petitioner provided advisory/consultancy services, which do not require such presence.

3. Services are NOT Related to Immovable Property [Section 13(4)]

  • Advisory services regarding investments do not constitute services directly in relation to immovable property.
  • The petitioner did not perform construction, maintenance, or property-related services.

4. Services Qualify as Export of Services

All conditions under Section 2(6) of IGST Act were satisfied:

  • Supplier located in India
  • Recipient located outside India
  • Payment received in foreign exchange
  • Place of supply outside India (Section 13(2))

Therefore, services are export of services.

5. Orders of Authorities Set Aside

  • The Court held that the reasoning of authorities was legally flawed and unsustainable.
  • No need for remand as facts were clear.
  • Directed refund of ITC to be processed within 8 weeks.

Important Clarifications

  • Advisory/consultancy services provided on principal-to-principal basis are not intermediary services.
  • Merely because services relate to investments in India does not make them related to immovable property.
  • The concept of intermediary requires three parties, not two.
  • GST treatment should remain consistent with substance of transaction, not assumptions.

Sections Involved

  • Section 2(6), IGST Act, 2017 – Export of Services
  • Section 2(13), IGST Act, 2017 – Intermediary
  • Section 13(2), IGST Act, 2017 – General rule for place of supply
  • Section 13(3)(b), IGST Act, 2017 – Services requiring physical presence
  • Section 13(4), IGST Act, 2017 – Services related to immovable property
  • Section 13(8)(b), IGST Act, 2017 – Intermediary services
  • Section 54, CGST Act, 2017 – Refund of ITC

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/VIB17082023CW144272022_120321.pdf

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