BPO service provided oversea client not an intermediatory service

The Hon'ble Punjab and Haryana High Court in Genpact India Pvt. Ltd. v. Principal Commissioner of GST And Cx [C.W.P. No. 14151 of 2021 dated August 09, 2023] set aside the show cause notice and held that assessee was not "intermediary" and therefore, the refund claim of unutilized Input Tax Credit ("ITC") used in making zero rated supplies of services without payment of IGST was allowed.

Facts

M/s. Genpact India Pvt. Ltd. ("the Petitioner") was providing services to foreign entity and has invoiced the said services under LUT model and therefore, field refund application for claiming of unutilized ITC of such services.The Revenue Department ("the Respondent") allowed the refund.

Subsequently, issued a Show cause Notice 47/GST/GGM/2020-21 dated March 30, 2021 ("the Impugned SCN") raised the demand of service tax of INR 16,73,74,91,090/-on the ground thatthe services provided by the Petitioner are in the nature of "Intermediary Services" as per Section 2(13) of the Integrated Goods Services Tax Act, 2017 ("the IGST Act") and do not qualify as "export of services". The Impugned SCN also alleged to show cause why the extended period of limitation in terms of proviso to Section 73(1) of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Tax Act, 2017 ("the CGST Act") should not be invoked.

The Petitioner relied upon the Judgement of Genpact India Pvt. Ltd v. Union of India and others, [2022] 1 Centax 226 (P&H) dated November 11, 2022] wherein the Hon'ble Punjab and Haryana High Court held that the Petitioner was not "intermediary" and, therefore, the refund claim of unutilized ITC used in making zero rated supplies of services without payment of IGST was allowed.

Issue

Whether the BPO Services provided by the assessee to overseas clients is an intermediary service?

Held

The Hon'ble Punjab and Haryana High Court in C.W.P. No. 14151 of 2021 held as under:

• Relied upon the Judgement of Genpact India Pvt. Ltd v. Union of India and others, [2023 (68) G.S.T.L. 3 (P & H)] wherein the Hon'ble Punjab and Haryana High Court held that the Petitioner was not "intermediary" and, therefore, the refund claim of unutilized ITC used in making zero rated supplies of services without payment of IGST was allowed.
• Held that, the ratio of Genpact India Pvt. Ltd. case (supra) is directly applicable in this case.
• Set aside the Impugned SCN.