Case Law Details
Afortune Trding Research Lab LLP Vs Additional Commissioner (Appeals I) (Madras High Court)
Madras High Court held that receipt of export proceeds through authorized dealers like Paypal is in accordance with the direction issued by RBI and hence GST refund duly admissible.
Facts- Petitioner being exporter of service filed refund application u/s. 54 of the IGST Act read with Rule 89(2) of the CGST Rules. The Appellate Authority has rejected the refund claim mainly on the reason that the Appellant had not received the payment in foreign exchange and it was Paypal payment services who is acting as a gateway are the ones that are actually receiving the payment from the subscribers in foreign currency in India and they are transferring this in Indian currency to the Appellant, there is a violation of the Section 2(6) ibid of the IGST Act as well as violation of the above stated Board’s Circular as well as RBI directions.
Conclusion- Merely because the receipts are rooted through the intermediary and received in Indian currency ipso facto would not mean that the petitioner has not exported services within the meaning of Section 2(6) of the IGST Act, 2017. Receipt of payment by an intermediary for and on behalf of its client like the petitioner will qualify as payment received by the client. As the only requirement is with the payments received is freely convertible foreign exchange has to be directly remitted into the authorized dealers account as otherwise an intermediary will be violate the requirements of the foreign exchange.
Held that the petitioner is entitled for refund. Reference to Circular No.88/07/2019-GST dated 01. 02.2019 to concluded that the petitioner has not realized the amount in freely convertible foreign exchange therefore cannot be countenanced.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
