Iqvia Rds (Inida) Private Limited Vs Union of India (Karnataka High Court)
The Karnataka High Court considered two writ petitions challenging GST demands raised on data management services provided by an Indian entity to its foreign affiliate. The petitioner had entered into a Master Service Agreement with its parent company located in the United States, under which it undertook activities relating to clinical trials and allied data management services. The petitioner’s consistent stand was that these services constituted export of services, with the place of supply being the location of the recipient outside India, and were therefore zero-rated and not liable to GST.
The grievance raised before the Court was limited. While the impugned orders also contained other demands, the petitioner challenged them only to the extent they levied GST on data management services, despite the recipient being located outside the taxable territory. The petitioner relied on Circular No. 209/1/2018-ST dated 04.05.2018, which clarifies that for services involving development, testing, customisation, adaptation, upgradation, enhancement, and implementation of information technology software, the place of provision of service is the location of the recipient.
The respondents defended the impugned orders, contending that the demands were valid and that the writ petitions lacked merit. However, upon examining the material on record, the Court noted that both the adjudicating authority and the appellate authority had demanded GST on data management services rendered by the petitioner, notwithstanding the fact that the recipient of such services was situated in the United States.
