Dow Chemical International Private Limited Vs Commissioner of State Tax (GSTAT)
The Goods and Services Tax Appellate Tribunal (GSTAT) considered a batch of six appeals concerning refund claims filed for the period from January 2022 to June 2022. The appeals arose from orders of the Joint Commissioner of State Tax (Appeals), which had upheld the rejection of refund claims relating to Integrated Goods and Services Tax (IGST) paid under the reverse charge mechanism (RCM). The case is reported as Dow Chemical International Private Limited Vs Commissioner of State Tax (GSTAT).
The appellant, engaged in manufacturing and distribution of chemical components, had entered into a Procurement Agreement dated 1 July 2021 with Dow Europe GmbH, Switzerland. Under the agreement, Dow Europe functioned as a centralized procurement hub and undertook activities including identifying and approving suppliers, negotiating procurement terms, developing procurement strategies, reviewing contracts, and facilitating procurement operations for the appellant.
During January to June 2022, the appellant treated the services received from Dow Europe as “import of services” under the IGST Act and discharged IGST under RCM. Subsequently, the appellant contended that the services were actually “intermediary services” under Section 2(13) of the IGST Act. According to the appellant, the place of supply for intermediary services under Section 13(8)(b) was the location of the supplier, namely Switzerland, and therefore the transactions did not qualify as import of services liable to GST in India. The appellant reversed the input tax credit availed on the tax paid and sought refunds of the amounts deposited.
