Despite a circular issued by the CBIC regarding the scope of 'intermediary services' under the Service Tax and GST Regime, the Union of India continues to challenge decisions favoring the assessee before the Apex Court.
In one of the first appeals on the intermediary issue, the Chandigarh Bench of the Tribunal, in a final order dated February 27, 2018, clarified that an entity providing the main service on a principal-to-principal basis does not qualify as an 'intermediary' and its services constitute the export of services.
This decision was initially challenged before the High Court of Punjab & Haryana. On December 15, 2023, the High Court dismissed the appeal on grounds of non-maintainability, noting that the issue pertained to taxability, but allowed the Department to approach the Supreme Court.
Despite the CBIC's recent circular clarifying the scope of 'intermediary' services, the Department filed a civil appeal before the Supreme Court nearly five years and eleven months after the Tribunal's decision.
On July 10, 2024, the Supreme Court dismissed the Department's civil appeal, hopefully bringing finality to the issue. This decision is expected to end the long-standing saga of 'intermediary services,' which has wide implications for ITES and similarly placed companies.
Counsel for the Petitioner(s) : N.Venkataraman, A.S.G.; Gurmeet Singh Makker, AOR; Mukesh Kumar Maroria, AOR; V.C.Bharathi, Adv; Padmesh Mishra, Adv; Navanjay Mahapatra, Adv; Aditya Shankar Dixit, Adv; Dr. Arun Kumar Yadav, Dy. Govt, Adv;
Counsel for Respondent(s) : Senior Advocate, Mr. Tarun Gulati. The Indirect Tax practice team of Kochhar & Co., led by Ms. Reena Khair, Senior Partner, included Ms. Shreya Dahiya and Ms. Vrinda Bagaria, Principal Associates, and Mr. Subham Jaiswal, Senior Associate, who appeared in the matter. Mr. Vaibhav Joshi, Partner, Kochhar & co. was the AOR in the matter.
Case Title: COMMISSIONER OF CENTRAL EXCISE DELHI, NOW COMMISSIONER OF GOODS AND SERVICE TAX, GURUGRAM, HARYANA VERSUS M/S EVALUESERVE.COM PVT LTD
Click here to read/ download the order