Order Date – 09 October 2023

Parties: Vodafone Idea Limited Vs Union of India & Others

Facts –

• The Petitioner, Vodafone Idea Limited, has entered into various service agreements (International Roaming Agreements) with FTOs for providing IIR and ILD services. The consideration for providing IIR and ILD services to subscribers of FTOs during their visit to India, is paid by FTOs to the petitioner.
• They filed a refund application claiming that it had exported services and paid integrated tax as provided under Section 16 (3) of the Integrated Goods and Services Tax Act.
• The Adjudicating Authority did not accept the refund claims made by the petitioner and rejected the same in terms of four separate orders on the ground that the refund application filed by the petitioner was time barred in view of Clause (c) of Explanation (2) of Section 54, secondly supply of services cannot be treated as ‘export of services’ and FTO is situated in foreign land.

Issue –

• Whether the service provided by the petitioner to inbound subscribers of FTOs constitute export of services or not?

Order –

• The Divisional Bench of Hon’ble High Court observed that the petitioner had received payments in all cases after the invoices were raised. Thus, the date on which payments had been received from FTOs would be the relevant date for the purpose limitation under Section 54(1) of the CGST Act.
• Further, the Central Board of Indirect Taxes and Customs (CBIC) had issued a notification (GST Notification 13/2022-Central Tax dated 05.07.2022) relaxing the period of limitation by excluding the period commencing from 01.03.2020 to 28.02.2022 for computing the period of limitation. In view of the above, the controversy whether the petitioner had made the claims within the period of limitation, is no longer a contentious issue.
• Regarding the issue whether the services in question constitute ‘export of services’ it is not disputed that the Customs Excise and Service Tax Appellate Tribunal has in several cases following the decision of the Co-ordinate Bench of this Court in Verizon Communication India Pvt. Ltd. v. Assistant Commissioner of Service Tax, Delhi-III, allowed the appeals preferred by the petitioner and directed the refund.
• The Revenue has filed an appeal before the Supreme Court in the matter of the predecessor of the petitioner which was admitted by the Supreme Court by an order dated 02.12.2014. However, the direction to grant refund was not stayed. In view of the above, the present petition is allowed and the respondents are directed to refund the amounts as claimed by the petitioner.