Goods and Services Tax (GST)

(a) The Supreme Court has directed the Goods and Service Tax Network (GSTN) to open GST portal for filing Tran-1/Tran-2 from September 1, 2022 to October 31, 2022. The benefit can be claimed by all assesses whether or not they had filed writ petition, or case has been decided by Information Technology Grievance Redressal Committee (ITGRC). Further, it has been held that GSTN is required to ensure that there are no technical glitches during this time period. Also, concerned officers are required to verify transitional credit within 90 days, and thereafter pass appropriate order by granting opportunity of being heard to the assesses. Such transitional credit shall be reflected in electronic credit ledger of the assessee. Further, GST Council can issue appropriate guidelines to field formations in scrutinizing claims in this regard.

Takeaway: GST portal to be kept open from September 1, 2022 to October 31, 2022 for registered person to claim transitional credit in Form Tran-1 and Form Tran-2

[UOI Vs M/s Filco Trade Centre Private Limited, SLP No. 32709-32718/2018, Order dated July 22, 2022]

(b) The Petitioner is engaged in providing international inbound roaming services (IIR) and international long distance (ILD) services to foreign telecom operators (FTOs). The Petitioner filed application for refund of Integrated Goods and Services Tax (IGST) on export of services in Form RFD-01A in accordance with provisions of Section 54 of the Central Goods and Services Tax Act, 2017 (the CGST Act). The adjudicating authority rejected refund of IGST on ground that place of supply of services provided by the Petitioner was in India in terms of Section 13(3)(b) of the Integrated Goods and Services Tax Act, 2017 (the IGST Act) and therefore, cannot be considered as export of services. Being aggrieved by the said order, the Petitioner filed appeal before the Appellate Authority, which was allowed. However, the same was not implemented and thus, refund was not remitted to the Petitioner.

The Petitioner sought WP for implementation of such order and grant of refund. Simultaneously, the department filed WP for setting aside the said order passed by the Appellate Authority. The Petitioner argued that the services are rendered by it to FTOs and not to an individual (subscriber of FTOs). The customer of the Petitioner are the FTOs and the subscribers of FTOs are the customers of FTOs. Accordingly, the recipient of service is FTOs, which is located outside India and therefore, the place of supply is outside India. The Department contended that the subscriber and FTOs are acting on behalf of each other, accordingly the place of supply of such transaction would be governed by Section 13(3)(b) of IGST Act.

The Hon'ble High Court held that the Petitioner has provided services to FTOs and not individual subscribers of FTOs and observed that there is no evidence to substantiate that the FTOs have authorised its subscriber to be its representative. Accordingly, place of supply of telecom service rendered by the Applicant is the location of recipient of the service, i.e., location of the FTOs, which is outside India and therefore, Section 13(2) of the IGST Act shall be applicable. Thus, WP filed by department is dismissed and WP filed by the Petitioner is allowed.

Takeaway: Place of Supply for the telecom services provided to FTOs would be outside India.

[Vodafone Idea Limited Vs UOI, WP No. 3221 of 2021, Order dated July 04, 2022 (High Court, Bombay)]

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