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Haryana AAAR - Business support services performed in India for a foreign company, while facilitating services to an Indian client, qualify as intermediary services and not export of services [Order attached]

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02-Jul-2026 21:19:29

The Haryana Appellate Authority for Advance Ruling (AAAR) addressed a case involving M/s Maithani Enterprises, a Gurugram-based company providing sales and marketing consulting and HR consulting services to M/s Meteora Consulting Sdn. Bhd., Malaysia. The Malaysian company was executing a consulting project for an Indian company, Modenik Textiles Pvt. Ltd. Maithani Enterprises sought a ruling on whether its services qualified as export of services, which would be zero-rated and entitle them to a refund of unutilized Input Tax Credit (ITC).

The Haryana Authority for Advance Ruling (AAR) initially determined that Maithani Enterprises acted as an intermediary, making the place of supply India and taxable at 18% IGST, thereby denying export benefits and ITC refund. Dissatisfied with this decision, Maithani Enterprises appealed, arguing that their services were provided on a principal-to-principal basis to the Malaysian company, not as an intermediary.

The Appellate Authority reviewed the case and found that the agreement indicated Maithani Enterprises provided market services while collaborating with the Indian client's team, facilitating the foreign company's services to its Indian customer. This met the criteria of an intermediary under Section 2(13) of the IGST Act. Despite receiving consideration in foreign currency, the services were performed and utilized in India. Thus, the place of supply was determined by Section 13(8)(b) of the IGST Act, making the supply taxable in India and not an export of services. Consequently, the services were not zero-rated, and the denial of the ITC refund was upheld.

Order Date - 07 May 2026

Facts -

M/s Maithani Enterprises (Gurugram) provided sales & marketing consulting and manpower/HR consulting services to M/s Meteora Consulting Sdn. Bhd., Malaysia, which was executing a consulting project for an Indian company, Modenik Textiles Pvt. Ltd.
The petitioner sought an advance ruling on whether its services qualified as export of services, were zero-rated, and entitled it to a refund of unutilized ITC.
The Haryana AAR held that the petitioner acted as an intermediary, making the place of supply India, taxable at 18% IGST, and denied export benefits and ITC refund.
Aggrieved by the ruling, the petitioner appealed before the Haryana Appellate Authority for Advance Ruling, contending that it rendered services on a principal-to-principal basis to the Malaysian company and not as an intermediary.

Issue -

Whether the business support services rendered by the petitioner to a Malaysian company constituted export of services or intermediary services liable to GST in India?

Order -

The Appellate Authority observed that the agreement revealed the petitioner was engaged to provide on-the-ground market services while working with the Indian client's team, thereby facilitating the foreign company's services to its Indian customer. This established the presence of three parties and satisfied the ingredients of an intermediary under Section 2(13) of the IGST Act.
The Authority held that the contractual clauses, including the obligation to maintain the same confidentiality standards as the foreign company's employees, reflected a relationship akin to a principal-agent arrangement rather than an independent service provider acting on its own account.
It further observed that although consideration was received in foreign currency, the services were performed and effectively utilized in India. Therefore, the place of supply was governed by Section 13(8)(b) of the IGST Act, making the supply taxable in India and not an export of services.
The Authority distinguished the judicial precedents relied upon by the appellant, holding that unlike those cases, the petitioner was facilitating the foreign company's services to an Indian client. Consequently, the services were not zero-rated, and refund of unutilized ITC was rightly denied.