Advisory services to overseas group companies qualifies as export services

Cube Highways And Transportation Assets Advisor Private Limited Vs Assistant Commissioner CGST Division & Ors (Delhi High Court)

Conclusion: In present facts of the case, the Hon’ble High Court observed that the petitioner was rendering advisory services to entity in Singapore. The petitioner had repeatedly filed submissions before the concerned authorities (Adjudicating Authority as well as Appellate Authority) explaining that it is rendering “advisory services to overseas group companies with respect to investment avenues in transportation sector after performing its own analysis and due diligence”. The said Services were treated as ‘export of services’ and the Adjudicating Authority was directed to provide refund.

Facts: In present facts of the case, the petitioner has filed the present petitions impugning the orders passed by the Appellate Authority rejecting the appeals preferred by the petitioner against the orders passed by the Adjudicating Authority. The principal issue involved in petitions were common. The controversy, essentially, relates to whether the services rendered by the petitioner to a company having its principal place of the business in Singapore in terms of the Amended Support Service Agreement dated 06.06.2015 constitutes export of services. The petitioner claims that the services rendered by it are export of services because, the service recipient, is located overseas. However, the respondent authorities have held, on varying grounds, that services provided by the petitioner do not qualify as ‘export of services’ as the place of supply of services is in India.

The petitioner is a company incorporated under the Companies Act, 2013. It is engaged in the business of rendering investment advisory services related to the investment by non-resident group companies in the target companies in India, which are engaged in the transportation sector. The petitioner and Company at Singapore belong to the same group of companies. The petitioner had entered into a Support Service Agreement on 30.05.2015 with the said Company. The scope of services to be provided under the said agreement were subsequently altered. In terms of the Agreement, the petitioner agreed to provide Advisory Support Services as mentioned in the Agreement, the parties agreed that the petitioner would be remunerated at an arm’s length price to be determined on cost-plus markup basis.

The services rendered by the petitioner were accepted as ‘export of services’ by the Revenue under the Finance Act, 1994 (Pre-GST Regime) and the Input Tax Credit (hereafter ‘ITC’) was refunded to the petitioner as claimed. The petitioner filed its applications for refund of unutilized ITC for the financial years 2018-19 to 2020-21, which were rejected. The claims were subject matter of the present petitions.

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