Order Date – 23 March 2023

Parties: M/s Ernst and Young Limited Vs Additional Commissioner, CGST Appeals -II, Delhi and ANR. 

Facts –

• The Petitioner, M/s Ernst and Young Limited, is an Indian Branch Office of M/s Ernst & Young Limited, a company incorporated under the laws of United Kingdom (hereafter ‘E&Y Limited’). The petitioner applied for refund of the ITC availed for providing its professional services to its overseas EY entities for the periods December 2017 to March 2020. 
• The Adjudicating Authority had denied the said applications for refund of ITC on the premise that the petitioner is an ‘intermediary’ and thus, the place of supply of services is located in India, where the petitioner’s place of business is located and not where recipient of services is located.

Issue –

• Whether the petitioner is entitled to refund of ITC?

Order –

• The Divisional Bench of Hon’ble High Court observed that the services rendered by the petitioner to EY Entities, prior to roll out of the GST regime, was considered as ‘export of services’. It is also material to note that the petitioner’s application for refund of ITC for the period after March 2020 has also been accepted by the Adjudicating Authority.
• Since the recipient of the Services is outside India, the professional services rendered by the petitioner would fall within the scope of definition of ‘export of services’ as defined under Section 2(6) of the IGST Act.
• Thus, it was held that the Services rendered by the petitioner are not as an intermediary and therefore, the place of supply of the Services rendered by the petitioner to overseas entities is required to be determined on basis of the location of the recipient of the Services. The petition is, accordingly, allowed and the Adjudicating Authority is directed to process the petitioner’s refund application as expeditiously as possible.