Ernst And Young Limited Vs Additional Commissioner (Delhi High Court)
The Delhi High Court considered a writ petition challenging an appellate order that upheld rejection of refund claims for accumulated input tax credit (ITC) arising from export of services for the period December 2017 to March 2020. The petitioner, an Indian branch office of a UK-incorporated entity, had provided professional consultancy and advisory services to overseas group entities under arm’s length service agreements and received consideration in convertible foreign exchange. Refund claims were denied by the adjudicating authority on the premise that the petitioner acted as an “intermediary,” thereby fixing the place of supply in India under Section 13(8)(b) of the IGST Act and disqualifying the supplies as exports.
The Court entertained the petition because the statutory appellate remedy before the GST Appellate Tribunal was unavailable due to non-constitution. Examining the agreements and the nature of services, the Court noted that the petitioner directly rendered professional services to overseas recipients, issued invoices to them, and did not arrange or facilitate supplies between third parties. The authorities’ conclusion that the petitioner was an intermediary because services were rendered “on behalf of” the head office was held to be a misreading of the statutory definition.
