Order Date – 06 September 2023

Parties: Commissioner of Central Tax Vs M/s Singtel Globel India Pvt Ltd 

Facts –

• The Respondent, M/s Singtel Globel India Pvt Ltd had filed a refund claim of the unutilized input service credit of input services towards export of telecommunication services to Singapore Telecommunication Limited (SingTel) located in Singapore under Rule 5 of the CENVAT Credit Rules, 2004 read with the Place of Provision of Service Rules, 2012.
• The Commissioner (Appeals) allowed the refund claimed by the respondent whereby it was held that SGIPL is not an “intermediary‟ and was entitled to refund towards the CENVAT credit.
• Being aggrieved the department filed the appeal.

Issue – 

• Whether the export of telecommunication services is an intermediary service or export of service?

Order –

• The Single Bench of Hon’ble High Court observed from the agreement between SingTel and SGIPL, that there is no legal infirmity or irrational approach adopted by the learned CESTAT when it comes to conclude that SGIPL is not providing “intermediary services‟. The plea that SGIPL is not providing any services on its own account is misplaced.
• There is no contract between SingTel and service providers in India like Airtel, Vodafone, Reliance etc., and the agreement between SGIPL and SingTel is on principal-to-principal basis. Indeed, SGIPL has entered into separate contracts with the telecom operators in India but on its own account and not as in the nature of a broker or agent for SingTel.
• Agreement specifically stipulates that the relationship of the parties to the Agreement shall always and only be that of independent contractors and nothing in the Agreement shall create or be deemed to create a partnership or the relationship of principal and agent or employer and employee between the parties. Incidentally, the appellant has not even alleged that the aforesaid agreement is a camouflage, fraudulent or designed to get over the service tax dragnet.
• In the decision in Verizon Communications India Ltd. It was held that since the recipient of the service Verizon US was outside India, Verizon India rightly treated it as an “export of service‟ and accordingly it was exempted from the liability of paying service tax.
• The present appeals are bereft of any merit. Accordingly, the same are dismissed.