Vodafone Idea Limited Vs Union of India & Ors. (Delhi High Court)
Delhi High Court held that refund of Integrated Goods and Services Tax (IGST) in respect of telecommunication services rendered to inbound subscribers of Foreign Telecom Operators (FTOs) granted.
Facts- The petitioner has filed the present petition impugning a common order passed by the Appellate Authority dismissing the appeals preferred by the petitioner u/s. 107 of the Central Goods and Services Tax Act, 2017 against orders passed by the Adjudicating Authority.
The petitioner is, essentially, aggrieved by rejection of its claims for refund of Integrated Goods and Service Tax in respect of telecommunication services rendered by the petitioner pursuant to agreements with Foreign Telecom Operators (FTOs).
The Adjudicating Authorities as well as the Appellate Authority rejected the refund claims on, essentially, two grounds. First, that the services provided by the petitioner in respect of which refund of IGST was claimed did not qualify as export of services. And second, that the claims preferred were beyond the period of two years from the relevant dates and therefore, were barred by limitation.
The principal questions involved in the present petition are whether the telecom services provided by the petitioner to inbound subscribers of FTOs constitute export of services and whether its claims were within the period of limitation as specified u/s. 54(1) of the CGST Act.
Conclusion- The Central Board of Indirect Taxes and Customs (CBIC) had issued a notification (GST Notification 13/2022-Central Tax dated 05.07.2022) relaxing the period of limitation, inter alia, for filing a claim for refund u/s. 54(1) of the CGST Act. In terms of the said Notification, the period commencing from 01.03.2020 to 28.02.2022 is required to be excluded for computing the period of limitation.
The provisions for ascertaining the place of supply of services under Rule 6A of the ST Rules are similar to Section 2(6) of the IGST Act inasmuch as the services will be treated as export of services when (a) the provider of service is located in the taxable territory, (b) the recipient of the service is located outside India, and (d) the place of provision of the service is outside India.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioner has filed the present petition impugning a common order dated 31.08.2022 passed by the Appellate Authority (respondent 2) dismissing the appeals (four in number) preferred by the petitioner under Section 107 of the Central Goods and Services Tax Act, 2017 (hereafter CGST Act’) against orders passed by the Adjudicating Authority.
2. The petitioner is, essentially, aggrieved by rejection of its claims for refund of Integrated Goods and Service Tax (hereafter ‘IGST’) in respect of telecommunication services rendered by the petitioner pursuant to agreements with Foreign Telecom Operators (FTOs).
3. The Adjudicating Authorities as well as the Appellate Authority rejected the refund claims on, essentially, two grounds. First, that the services provided by the petitioner in respect of which refund of IGST was claimed did not as qualify export of services. And second, that the claims preferred were beyond the period of two years from the relevant dates and therefore, were barred by limitation.
4. According to the petitioner, the connectivity services rendered by it to inbound subscribers of FTOs qualifies as export of services as the services are rendered to an entity resident outside India- FTOs. The petitioner also claims that its claims for refund were within the prescribed period as the petitioner had received payments after the date of invoices and its claims were made within a period of two years of receipt of remittances for the services in question.
5. The principal questions involved in the present petition are whether the telecom services provided by the petitioner to inbound subscribers of FTOs constitute export of services and whether its claims were within the period of limitation as specified under Section 54(1) of the CGST Act.
Factual Context
6. The petitioner holds a telecommunication license from Government of India, and is engaged in providing telecommunication services including services in the nature of International Inbound Roaming Services (“IIR”) and International Long Distance Services (“ILD”) to inbound subscribers of FTOs.
7. The petitioner has entered into various service agreements (International Roaming Agreements) with FTOs for providing IIR and ILD services. Undisputedly, the consideration for providing IIR and ILD services to subscribers of FTOs during their visit to India, is paid by FTOs to the petitioner.
8. The petitioner filed its applications for refund of IGST claiming that it had exported services and paid integrated tax as provided under Section 16 (3) of the Integrated Goods and Services Tax Act (hereafter ‘IGST Act’). A tabular statement indicating the period for which refund was sought, the date for filing the refund claimed, and the amount of refund sought is set out below:
