V Ships India Pvt. Ltd. Vs Union of India & Ors. (Bombay High Court)
In V Ships India Pvt. Ltd. Vs Union of India & Ors., the Bombay High Court dealt with a batch of petitions concerning rejection of IGST refund claims on alleged failure to qualify as “export of services.” The petitioner, engaged in ship management services, had entered into an agreement dated 15 January 2013 with a foreign entity based in the United Kingdom. Under the pre-GST regime, similar services were treated as export of services and refunds were granted upon satisfying applicable conditions.
Under the GST regime, for the period January 2022 to June 2023, the petitioner paid IGST on such services and applied for refunds under Section 16 of the IGST Act, claiming zero-rated supply. The department issued show cause notices contending that the services were rendered on a principal-agent basis and qualified as “intermediary services,” thereby disqualifying them from export status under Section 2(6) of the IGST Act. The adjudicating authority rejected the refund claims, and the appellate authority upheld these rejections.
Before the Court, the petitioner argued that the core issue, namely the nature of services under the agreement, had not been examined by the appellate authority. It was contended that there was no discussion or finding on whether the services qualified as export of services under the IGST Act, despite reliance on the same agreement under which refunds were granted in the earlier regime. The petitioner also relied on various decisions of the Court in similar matters where orders rejecting refunds were set aside due to lack of proper consideration of contractual terms and statutory provisions.
