In W.P. (C) 14427/2022 -DEL HC- Delhi High Court rules that ‘Advisory Services’ provided by Cube Highways to overseas client constituted ‘Export of Services’
Justice Vibhu Bakhru & Justice Amit Mahajan [17-08-2023]

Read Order: M/s Cube Highways and Transportation Assets Advisor Private Limited V. Assistant Commissioner CGST Division & Ors

Chahat Varma

New Delhi, August 29, 2023: The Delhi High Court has ruled that the advisory services provided by M/s Cube Highways and Transportation Assets Advisor Private Limited (petitioner) to I Squared Asia Advisors Pte. Ltd., a company based in Singapore, constituted export of services. The Court determined that the petitioner was not acting as an intermediary and that the services were not supplied within India.

The present case involved a dispute regarding whether the services provided by the petitioner, to I Squared Asia Advisors Pte. Ltd., a Singapore-based company, constituted export of services. The services were governed by an Amended Support Service Agreement dated 06.06.2015. The petitioner asserted that the services qualified as export of services due to the overseas location of I Squared, the service recipient. However, the authorities held, that the services provided by the petitioner did not meet the criteria for export of services, as the place of supply was determined to be in India.

The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan examined the relevant clauses of the Agreement that governed the appointment of the service provider and outlined the scope of services and observed that the clauses clearly indicated that the petitioner was obligated to function as an independent service provider throughout the duration of the agreement. It was evident that the agreement between the petitioner and I Squared operated on a principal-to-principal basis. The agreement explicitly stated that the petitioner's role was not that of an agent or partner of I Squared.

The bench further observed that the fact that I Squared might have made investments in Indian entities based on the advisory services provided by the petitioner did not automatically classify the petitioner as an 'Intermediary' in the arrangement.

The bench remarked that being an 'Intermediary' implies a three-party relationship involving the supplier of the principal service, the recipient of the service, and the intermediary facilitating or arranging the service. Since the petitioner was providing advisory services on its own account and not merely facilitating the service from another supplier, it did not meet the criteria to be considered an 'Intermediary' under the given circumstances.

The bench also stated that there was no evidence or material available that even remotely indicated that the services provided by the petitioner were not in line with their claimed nature, which was advisory services pertaining to investments in India. The bench pointed out that neither the Adjudicating Authority nor the Appellate Authority possessed any grounds to doubt the petitioner's assertion that their services involved offering advisory support for investment purposes in India.

With the above observations, the present petitions were allowed. The bench directed the Adjudicating Authority to process the petitioner’s claim for refund of unutilized ITC on export of services, as expeditiously as possible.