In Writ Petition No. 749 of 2021 -BOM HC- Bombay High Court confirms jurisdiction of Central Authorities under IGST Act for export of services
Justice G.S. Kulkarni & Justice Jitendra S. Jain [05-07-2023]

Read Order: Media Net Software Services (India) Pvt. Ltd v. Union of India & Ors

Chahat Varma

New Delhi, July 18, 2023: The Bombay High Court has clarified in a recent judgment that the jurisdiction for the export of services lies under the Integrated Goods and Services Tax (IGST) Act. The court emphasized that the Central authorities under the IGST Act had jurisdiction over all transactions related to the export of services.

The court's ruling came in a case where Media Net Software Services (India) Pvt. Ltd. (petitioner) had deposited tax on an export transaction with the authorities under the Central Goods and Services Tax Act (CGST Act)/Maharashtra Goods and Services Tax Act (MGST Act). The petitioner contended that these authorities lacked the jurisdiction to demand tax on the export of services. The petitioner had also filed refund applications, which were subsequently rejected.

The bench of Justice G.S. Kulkarni and Justice Jitendra S. Jain highlighted that its previous decision in the case of Dharmendra M. Jani Vs. The Union of India & Ors. [LQ/BomHC/2023/1612] established that the jurisdiction of authorities under the IGST Act and CGST/MGST Acts were separate. Specifically, regarding the export of services, the Division Bench had ruled that it fell under the purview of the IGST Act, with the Central authorities having jurisdiction over such transactions.

The bench remarked that in light of the legal position established, the CGST/MGST authorities no longer had jurisdiction to retain the tax amount on export transactions. Instead, the bench directed the state authorities to transfer the tax amount, along with applicable statutory interest, to the Central Authority with jurisdiction under the IGST Act.

Considering this, the bench set aside the order of the Deputy Commissioner of Sales Tax rejecting the petitioner's refund application. The refund application was restored and transferred to the Assistant Commissioner (Central Taxes) for appropriate further actions in accordance with the court's decisions in the Dharmendra M. Jani’s case.