Case Law Details
Vuram Technology Solutions Private Ltd. Vs Additional Commissioner of GST (Appeals) (Madras High Court)
Introduction: In a significant decision, the Madras High Court ruled in the case of Vuram Technology Solutions Private Ltd. Vs. Additional Commissioner of GST (Appeals) regarding the eligibility for a refund on exported services provided by the petitioner to its foreign subsidiary. The court’s interpretation clarified the legal requirements under the Integrated Goods and Services Tax (IGST) Act, 2017.
Detailed Analysis: The High Court scrutinized the impugned order rejecting the refund claim filed by the petitioner under Section 54/55 of the CGST Act, 2017. The order cited Section 2(6) of the IGST Act, particularly focusing on the condition that the supplier and recipient of service should not merely be establishments of a distinct person, emphasizing independence and equal bargaining power.
However, the court observed that the petitioner and its subsidiary, Vuram Australia Pty Ltd., were distinct legal entities, not merely establishments of a distinct person. The court highlighted Circular No.161/17/2021-GST dated 20.09.2021 issued by the Central Board of Indirect Taxes and Customs, clarifying the legal status of companies incorporated in India and their subsidiaries abroad. The circular affirmed that such entities are separate persons under the CGST Act, debunking the notion of being merely establishments of a distinct person.
The court also referenced a judgment by the Delhi High Court in a similar context, reinforcing the interpretation provided in the circular. It noted that the impugned order failed to consider the circular and passed mechanically, disregarding the provisions of law.
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