The petitioner was providing 3D map-making services to an entity based in Abu Dhabi. It imported satellite images from the UK. The images were processed and sent to Abu Dhabi via File Transfer Protocol (FTP) (email). It applied for a refund of accumulated input tax credit under Section 54 of the CGST Act, 2017, claiming the benefit of the export of services. The refund was sanctioned. Revenue filed an appeal before the Ld. Appellate Authority contending that
- the condition of export is not satisfied, and
- Services provided fall under “online information database access or retrieval service. Appellate authority allowed the appeal. Thus, a petition was filed.
The High Court of Bombay set aside the order and allowed the petition. It was held:
- The agreement is with a foreign party. Services are provided and delivered to entities located outside India. Payment is received in convertible foreign exchange. Thus, all conditions of section 2(16) export of service are satisfied.
- Receipt of payment from a related entity of the foreign service recipient outside India would not lead to denial of the benefit of export of service.
- Services are not OIADR services. Any service provided over email would not become OIADR service. Such services are specialized and customized and not available for purchase online. The scope of the definition of OIDAR is explained.
- The agreement between parties needs to be understood. Substance over form shall prevail.
- No evidence was led by Revenue to disprove the claim of the petitioner. Accordingly, a refund was allowed.
Globolive 3D Pvt. Ltd. vs. Union of India & Ors.—WP No. 39 of 2023 (Bom. HC.)
