In SERTA 10/2023 -DEL HC- Delhi High Court upholds refund claim of Singtel Global India for providing global tele communication & support services to SingTel Singapore
Justice Yashwant Varma & Justice Dharmesh Sharma [06-09-2023]

Read Order: Commissioner of Central Tax V. M/s Singtel Global India Pvt Ltd

Chahat Varma

New Delhi, September 11, 2023: The Delhi High Court has upheld the refund claim of M/s Singtel Global India Pvt. Ltd. (SGIPL), an Indian company providing global telecommunication and support services to Singapore Telecommunication Limited (SingTel).

In the said case, SGIPL (appellant), had entered into an agreement with SingTel, a licensed telecommunications service provider in Singapore. The appellant stated that SGIPL merely procured services from other Indian service providers (such as Airtel, Vodafone, Tata, Reliance) and supplied them to Singtel without any alteration. SGIPL contended that, according to Rule 3 of the Service Tax Rules, the place of provision of services would be considered based on the location of the recipient of services, which was outside India, and that it was not an 'intermediary'.

The Commissioner of Central Tax filed the present appeal against the refund claimed by SGIPL, under Rule 5 of the CENVAT Credit Rules, 2004, read with the Place of Provision of Service Rules, 2012. The refund pertained to the unutilized input service credit of input services used by SGIPL for exporting telecommunication services to SingTel, situated in Singapore, and the appeal resulted in a favourable outcome for SGIPL.

The division bench of Justice Yashwant Varma and Justice Dharmesh Sharma referred to Rule 2(f) of the Place of Provision of Services Rules, which states that an entity or person can be classified as an ‘intermediary’ if they work as a broker, agent, or any other person who arranges or facilitates a provision of a service or supply of goods between two or more persons, except if that person provides the main service or supplies the goods on their own account.

The bench carefully examined the terms and conditions of the Agreement between SingTel and SGIPL and found no legal infirmity or irrationality in the approach taken by the CESTAT in concluding that SGIPL was not offering 'intermediary services.'

The bench noted that there was no contract between SingTel and the service providers in India, such as Airtel, Vodafone, Reliance, etc. The agreement between SGIPL and SingTel was on a principal-to-principal basis.

The bench also noted that Clause 19 of the Agreement explicitly stated that the relationship between the parties to the Agreement would always and only be that of independent contractors. It clarified that nothing in the Agreement would create or be considered to create a partnership, principal-agent relationship, or employer-employee relationship between the parties.

The bench further remarked that the submissions advanced by the Standing Counsel for the appellant overlooked the fact that the recipient of services was based outside India.

The bench also observed that in addition to facilitating the main service of telecommunication services, SGIPL also provided customer care and customer support services to end consumers located in Singapore and foreign territories registered with SingTel Singapore. SingTel did not have any contracts with telecom service providers in India, and the end consumers were situated in Singapore and other foreign territories covered by SingTel. These consumers had the independent right to request services from SingTel and make payments to SingTel accordingly.

Thus, the bench held that the present appeals were bereft of any merit.