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$~22

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IN THE HIGH COURT OF DELHI AT NEW DELHI

%

Date of Decision: 22^nd August, 2023

+

W.P.(C) 1255/2023

BOKS BUSINESS SERVICES PVT LTD ..... Petitioner

Through:

Ruchir Bhatia, Adv.

versus

COMMISSIONER OF CENTRAL GOODS AND SERVICES

TAX DELHI SOUTH AND ANR

..... Respondents

Through:

Ms. Anushree Narain, Standing

Counsel with Ms. Shivangi

Sinha, Adv. for all respondents.

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

HON'BLE MR. JUSTICE AMIT MAHAJAN

VIBHU BAKHRU, J.

1.

The petitioner has filed the present petition being aggrieved by

the denial of refund of unutilized input tax credit in respect of “zero

rated supplies”, in accordance with Section 16 of the Integrated Goods

and Services Tax Act, 2017 (hereafter ‘the IGST Act’).

2.

The petitioner is engaged in the business of providing book

keeping, payroll, and accounting services through the use of cloud

technology to its affiliated entity (TC Outsourcing Limited, previously

known as Boks Business Services Limited) incorporated in the United

Kingdom.

3.

The petitioner made an application for refund of unutilized

Digitally Signed

By:KAMALDEEP KAUR

Signing Date:28.08.2023

17:46:32

Signature Not Verified

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input tax credit in respect of the export of services for the tax periods,

April 2018 to March 2019 and April 2019 to December 2019, in the

requisite form (Form RFD 01).

4.

The petitioner received a show cause notice dated 24.06.2020

proposing to reject the petitioner’s claim for the refund on the ground

that the services rendered by the petitioner to its foreign client

appeared to fall in the category of “intermediary services” and,

therefore, the place of supply of services was within the territory of

India.

5.

The petitioner responded to the said show cause notice by

explaining the nature of its services. The petitioner’s explanation was

not accepted. Its claims for refund of input tax credit for the

aforementioned tax periods were rejected by respective orders dated

23.07.2020, passed in similar terms. The said orders indicate that the

concerned officer had noted that the petitioner had charged 500 GBP

per workstation and, therefore, concluded that the petitioner was not

the principal service provider, providing services through those

workstations. On the basis of aforesaid reasoning, the concerned

officer held that the petitioner was an “intermediary”, in terms of

Section 2(13) of the IGST Act, in respect of the services rendered by

it. Thus, the services rendered by the petitioner did not qualify as

export of services under Section 2(6) of the IGST Act.

6.

Aggrieved by the said order, the petitioner preferred appeals

before the Appellate Authority, which were disposed of by a common

order: Order-in-Appeal no.133/20-21 dated 22.04.2021. The said

Order-in-Appeal indicates that the Appellate Authority had examined

Digitally Signed

By:KAMALDEEP KAUR

Signing Date:28.08.2023

17:46:32

Signature Not Verified

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the copy of an agreement executed between the petitioner and its

foreign affiliate and had noted that in terms of the said agreement, the

petitioner had agreed to act as an agent.

7.

In view of the above, the Appellate Authority concluded that the

petitioner was not a principal service provider to the foreign clients.

8.

The principal question to be considered is whether the petitioner

can be considered as an “intermediary” within the meaning of Section

2(13) of the IGST Act in the context of the services rendered by it.

9.

Undisputedly, the petitioner has rendered services to its foreign

affiliate, Boks Business Services Limited, in terms of the agreement

dated 12.05.2017. The recitals and clauses 1, 2 and 5 are relevant. The

same are set out below:

registered office at 3 Acorn Business Centre, Northarbour

Road, Cosham, Portsmouth, United Kingdom, PO6 3TH

represented by its duly authorised signatory Mr. Stuart Burns

and

having its registered office at 204,