Case Note & Summary
The petitioner, Globolive 3D Private Limited, a company incorporated under the Companies Act, 1956, entered into a Service Agreement dated 09 September, 2019 with M/s. Emirates Defence Industries Co. PJSC, a UAE-based entity, to provide satellite derived 3D city models of three cities in the UAE. The petitioner filed a refund application for the Integrated Goods and Services Tax (IGST) paid on these services, claiming that the services qualified as 'export of services' under Section 2(6) of the Integrated Goods and Services Tax Act, 2017 (IGST Act). The refund was initially granted by the adjudicating authority, but the department appealed to the Joint Commissioner, CGST and Central Excise (Appeal-I), Mumbai, who allowed the department's appeal and set aside the refund, holding that the services were 'Online Information Database Access or Retrieval (OIDAR) services' under Section 2(17) of the IGST Act, and thus the place of supply was in India under Section 13 of the IGST Act. Aggrieved, the petitioner filed a writ petition under Articles 226 and 227 of the Constitution of India before the Bombay High Court, as the appellate tribunal was not constituted. The court framed the issue of whether the services were 'export of services' or 'OIDAR services'. The petitioner argued that the services were customized, involved human skill, and were not automated, thus not OIDAR. The respondents contended that the services were delivered electronically and fell within the definition of OIDAR. The court analyzed the definitions and held that OIDAR services are those which are automated and delivered over the internet with minimal human intervention, while the petitioner's services required significant human skill and customization. The court also noted that the recipient was outside India, the services were used outside India, and payment was in convertible foreign exchange, satisfying all conditions for 'export of services'. The court set aside the appellate order and restored the refund, directing the respondents to process the refund within four weeks.
Headnote
A) Goods and Services Tax - Export of Services - Section 2(6) IGST Act, 2017 - The petitioner provided satellite derived 3D city models to a UAE client. The court held that the services qualify as 'export of services' as the recipient is outside India, the services are used outside India, and payment is in convertible foreign exchange. The services are not OIDAR services as they are customized and not automated. (Paras 3, 16-20) B) Goods and Services Tax - OIDAR Services - Section 2(17) IGST Act, 2017 - The court held that OIDAR services are those which are automated and delivered over the internet with minimal human intervention. The petitioner's services involved significant human skill and customization, thus not falling under OIDAR. (Paras 17-20) C) Goods and Services Tax - Place of Supply - Section 13 IGST Act, 2017 - The place of supply for the petitioner's services is outside India as the recipient is located outside India and the services are used outside India, confirming the classification as export of services. (Paras 13, 20) D) Constitutional Law - Writ Jurisdiction - Articles 226 and 227 of the Constitution of India - The court entertained the petition due to the non-constitution of the appellate tribunal, exercising its extraordinary jurisdiction to prevent injustice. (Paras 2, 21)
Issue of Consideration
Whether the services rendered by the petitioner of providing Satellite derived 3D model services would fall within the purview of 'export of services' as defined under Section 2(6) of the IGST Act or would be categorized as Online Information Database Access or Retrieval services as defined under Section 2(17) of the IGST Act, in the context of Section 13 of the IGST Act.
Final Decision
The court allowed the writ petition, set aside the appellate order dated 31 March, 2021, and restored the refund order. Directed the respondents to process the refund within four weeks from the date of the order.
Law Points
- Export of services
- OIDAR services
- Place of supply
- Refund of IGST
- Interpretation of Section 2(6) and Section 2(17) of IGST Act
- 2017
