Commissioner Of Central Tax vs. M/S Singtel Global INDIA PVT LTD

Held

The Court held that SGIPL's services do not qualify as 'intermediary services'. The reasoning was based on the interpretation of the agreement between SGIPL and SingTel, relevant statutory rules, and precedents like this Court's decision in Verizon Communications India Ltd. v. Assistant Commissioner of ST, Delhi-III and the CESTAT's decision in M/s. Black Rock Service India Private Ltd. v. Commissioner of CGST. The Court found that SGIPL provides services on its own account to SingTel, and the recipient of these services is based outside India. SGIPL also provides customer care and support services to end consumers in Singapore and other foreign territories. The Court applied the analogy from the Verizon case, emphasizing that the recipient of the service is outside India, and therefore, SGIPL is entitled to treat its services as an export of service. The Court dismissed the appeals, upholding the CESTAT's decision that SGIPL is entitled to the refund of unutilized CENVAT credit totaling Rs. 13,32,91,031/- for the period July 2015 to June 2017.

Facts

The Commissioner of Central Tax (appellant) filed three appeals against a common order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dated December 7, 2022. The CESTAT had dismissed the appellant's appeals against orders passed by the Commissioner (Appeals). These orders allowed refund claims by M/s. SingTel Global India Pvt. Ltd. (SGIPL) for unutilized input service credit. The claims pertained to the export of telecommunication services to Singapore Telecommunication Limited. The refund amounts totaled Rs. 1,32,70,532/- for July-September 2015, Rs. 8,69,82,565/- for October 2015-December 2016, and Rs. 3,30,37,934/- for January-June 2017. SGIPL, an Indian company, provides global telecommunication and ancillary support services, exporting part of its services under an agreement with Singapore Telecommunication Limited.

Key Issues

1. Whether the services provided by SGIPL qualify as 'intermediary services' under Rule 6A(1)(d) of the Service Tax Rules read with Rule 9(C) of the Place of Provision of Service Rules, 2012, thereby precluding them from being considered an export of service? (Question of law) Petitioner's Arguments: The appellant argued that SGIPL merely procures and supplies services from Indian telecom operators to Singtel without alteration. SGIPL does not provide these services 'on their own account' and thus falls within the definition of 'intermediary services'. They contended that Rule 9 of the POPS Rules dictates the place of provision as the location of the service provider, and combined with the definition of 'intermediary services', these provisions mean SGIPL is not exporting services but merely facilitating them for a handling fee and reimbursement of actual charges. Respondent's Arguments: SGIPL contended that the place of provision of services is determined by the location of the recipient of services under Rule 3 of the ST Rules, which is outside India. They asserted they are not an 'intermediary'.