Varian Medical Systems International India Pvt. Ltd. Vs Union of India & Ors. (Bombay High Court)
Software Development Services to Overseas Group Entity Cannot Be Denied Export Refund Without Proper Determination of “Intermediary” Status: Bombay High Court
The petitioner is providing software development services to its group entity located outside India. It claimed that the services are exported in terms of section 2(6) of the IGST Act. It claimed refund of accumulated input tax credit under section 54 of the CGST Act read with Rule 89 of the Rules. Refund of Rs.12.12 crores was rejected holding that the petitioner is an “intermediary” under section 13(8)(b) of the Act. Hence; petition was filed.
The Hon’ble Bombay High Court set aside the order and allowed the petition. It held: (i) the original authority has not passed a reasoned order as to whether the petitioner is an “intermediary” or not; (ii) similar issue has been decided in Sundyne Pumps; Vistex Asia and V Ships case; (iii) in that case the High Court examined the agreement and held that the Indian subsidiary was not an “agent”; (iv) accordingly; remands the matter back to the original authority to issue a fresh notice in two weeks and examine the issue again.
