Order date – 11 November 2022

 Facts –

• The Petitioner, Genpact India Pvt. Ltd. is a Business Process Outsourcing (BPO) Service Provider located in India. Petitioner is registered with Haryana GST Authorities and is involved in providing a host of services collectively referred as BPO Services to customers located in India as well as outside India.
• Petitioner entered into a Master Services Sub-Contracting Agreement dated 01.01.2013 (hereinafter referred to as MSA) with Genpact International Incorporated (GI) an entity located outside India. It is asserted that as per terms of the MSA various services are to be provided by the petitioner on a principal to principal basis. Further the petitioner is engaged by GI for actual performance of BPO services to the clients of GI located outside India.
• The petitioner requested for refund of un-utilized ITC on account of zero rated supplies of services without payment of Integrated Goods and Service Tax (IGST) under Letter of Undertaking. The same was rejected on the ground that the services provided by the petitioner are in the nature of “intermediary services” as per Section 2 (13) of the Act and do not qualify as “export of services” in terms of Section 2 (6) of the Act.

Issue –

• Whether the activities carried on by the petitioner would be covered under the expression “intermediary”?

Order –

• The Hon’ble High court observed that Section 2(6) of the IGST Act lays down the conditions which need to be fulfilled for qualification of a service as “export of services”. A conjoint reading of Section 13 (2) and Section 13 (8) clarifies the manner for determining the place of supply of services where location of supplier or location of recipient is outside India.
• Scope of an “intermediary” is to mediate between two parties i.e. the principal service provider (the 3rd party) and the beneficiary (the agents principal) who receives the main service and expressly excludes any person who provides such main service “on his own account”.
• A bare perusal of the recitals and relevant clauses of the MSA reproduced do not in any manner indicate that petitioner is acting as an “intermediary” so as to fall within the scope and ambit of the definition of “intermediary” under Section 2 (13) of the IGST Act.
• The Hon’ble High court also examined the MSA it provides that GI has sub-contracted the petitioner for providing the services to its customers. It is clear therefrom that the petitioner is engaged by GI for actual performance of BPO services and information technology services to the customers of GI. Petitioner would be held responsible for all risk related to performance of services which would be akin to services provided on “its own account”.
• In the present case the court find that in the written statement reference is made to a Transfer Pricing Report as also to draw a distinction between two categories of supplies as per MSA i.e. main supply and the ancillary supply. The passing of the impugned order is sought to be justified that the main supply takes place between GI and its customers whereas it is the ancillary supply which is provided by the applicant to facilitate the provision of the main supply.
• The Court relied on the decision of of the Apex Court in Mohinder Singh Gill and another Vs. The Chief Election Commissioner, New Delhi and others (1978) 1 SCC 405, wherein it had been held that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of an affidavit or otherwise. 
• Hence it is held that the petitioner is not an “intermediary” under Section 2 (13) of the IGST Act, and refund is granted.