W.P.(C) 11413/2023

Page 1 of 6

$~2

*

IN THE HIGH COURT OF DELHI AT NEW DELHI

%

+

W.P.(C) 11413/2023

XILINX INDIA TECHNOLOGY

SERVICES PVT LTD

..... Petitioner

Through:

Ms. Ashwini Chandrasekaran &

Ms. Priyanka Rathi, Advs.

Versus

THE SPECIAL COMMISSIONER

ZONE VIII & ANR.

..... Respondents

Through:

Mr. Rajeev Aggarwal, Adv.

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

HON'BLE MR. JUSTICE AMIT MAHAJAN

VIBHU BAKHRU, J.

1.

The petitioner has filed the present petition, inter alia,

impugning the Refund Rejection Order dated 08.06.2023 (hereafter

‘the impugned order’) whereby the petitioner’s application for

refund of Integrated Goods & Service Tax (IGST) amounting to

₹1,83,34,289/- was rejected.

2.

The petitioner is a company incorporated under the Companies

Act, 2013. It has its registered office in Hyderabad, Telangana and

branch office in New Delhi. The petitioner is a subsidiary of Xilinx

Inc., USA, a company registered in the United States of America. The

petitioner is an Export Oriented Unit (hereafter ‘EOU’) registered

Digitally Signed

By:DUSHYANT

RAWAL

Signing Date:12.09.2023

Signature Not Verified

W.P.(C) 11413/2023

Page 2 of 6

with the Software Technology Parks of India (hereafter ‘STPI’) and is

primarily engaged in exporting information technology software

services to entities located overseas.

3.

The petitioner entered into an Intercompany Service Agreement

(hereafter ‘the Agreement’) dated 10.06.2016 with its holding

company (Xilinx USA) for export of information technology services.

In terms of the Agreement, it was agreed that the petitioner would be

remunerated on costs plus 15% mark-up basis.

4.

The respondents proposed to reject the petitioner’s application

for refund of IGST and issued a show cause notice dated 18.01.2023.

The said show cause notice indicates that the petitioner’s claim was

proposed to be rejected on the ground that it did not satisfy the

condition as laid down in condition (v) of Section 2(6) of the

Integrated Goods & Service Tax Act, 2017 (hereafter ‘the IGST

Act’), namely, “that the supplier of service and the recipient of service

Explanation 1 in section 8”.

5.

The respondents also set out the Explanation I to Section 8 of

the IGST Act, which is reproduced below:

“Explanation 1. ––For the purposes of this Act, where a

person has, ––

(i)

an establishment in India and any other

establishment outside India;

(ii)

an establishment in a State or Union

territory and any other establishment outside that

State or Union territory; or

(iii)

an establishment in a State or Union

territory and any other establishment registered

Digitally Signed

By:DUSHYANT

RAWAL

Signing Date:12.09.2023

Signature Not Verified

W.P.(C) 11413/2023

Page 3 of 6

within that State or Union territory,

then

such

establishments

shall

be

treated

as

establishments of distinct persons.”

6.

According to the respondents, the petitioner and its holding

company are establishments of a single person and therefore the

services provided by the petitioner to its holding company did not

constitute as export of services within the meaning of Section 2(6) of

the IGST Act.

7.

The petitioner responded to the said show cause notice clearly

explaining that it was an independent company incorporated in India

and its supplies to its holding companies were required to be

considered as export of services. The petitioner also referred to

Circular dated 20.09.2021 (Circular No.161/17/2021-GST) issued by

Central Board of Indirect Taxes & Customs (hereafter ‘CBIC’). The

said circular expressly clarifies that supply of services by a

subsidiary/sister concern/group concern of a foreign company, which

is inc