Recently in case of Genpact India Pvt. Ltd. Vs Union of India and others [CWP-6048-2021 (O&M) Date of Pronouncement:11.11.2022], it was held by the hon’ble Punjab and Haryana High Court held that BPO services provided to Overseas client would not fall under “intermediary” services.
In the aforesaid judgment, court has found that:
- The petitioner provides the main service directly to the overseas clients of GI (i.e. main contractor) but does not get any remuneration from such clients.
- Pursuant to the arrangement, it is GI which gets paid by its customers to whom the services are being provided directly by the petitioner.
- Nothing has been brought on record to show that the petitioner has a direct contract with the customers of GI.
- Still further there is nothing on record to show that petitioner is liaisoning or acting as an “intermediary” between GI and its customers.
- All that is evident from the record is that the petitioner is providing the services which have been sub contracted to it by GI.
- As a Sub-contractor it is receiving fee/charges from the main contractor i.e. GI for its services.
- The main contractor i.e. GI in turn is receiving commission/agents from its clients for the main services that are rendered by the petitioner pursuant to the arrangement of sub-contracting.
- Even as per the afore-noticed circular dated 20.09.2021 and in reference to para 3.5 it stands clarified that sub-contracting for a service is not an “intermediary” service.
On the basis of above findings, it was held that above services do not cover under the definition of an “intermediary” given under Section 2 (13) of the IGST Act, 2017. Consequently, the order in original dated 14.03.2019 (Annexure P-3) granting refund of Rs.26,34,61,625/- in favour of the petitioner is restored.
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