Genpact India Pvt. Ltd VS Union Of India

The petitioner, a Business Process Outsourcing (BPO) service provider located in India, is contesting an order dated February 15, 2021, issued by the Additional Commissioner of Central Goods and Services Tax (CGST) Appeals in Gurugram. This order classifies the services provided by the petitioner as “Intermediary Services” under Section 2 (13) of the Integrated Goods and Services Tax (IGST) Act. Consequently, the services are not considered “export of services” as defined in Section 2 (6) of the Act. This classification led to the rejection of the petitioner’s claim for a refund of un-utilized Input Tax Credit (ITC) that was used for making zero-rated supplies of services without the payment of IGST. The petitioner challenges this decision, seeking to overturn the ruling and obtain the refund.

The petitioner is a Business Process Outsourcing (BPO) service provider based in India, specifically in the state of Haryana. The primary contention in the petition is against the order dated February 15, 2021, issued by the Additional Commissioner of Central Goods and Services Tax (CGST) (Appeals) in Gurugram. This order classified the services provided by the petitioner as “Intermediary Services” under Section 2(13) of the Integrated Goods and Services Tax (IGST) Act, rather than “export of services” as defined in Section 2(6) of the same Act. Consequently, the petitioner’s claim for a refund of unutilized Input Tax Credit (ITC) used in making zero-rated supplies of services without payment of Integrated Goods and Services Tax (IGST) was rejected.

The petitioner is registered with the Haryana GST Authorities and offers a wide range of services under the umbrella of BPO services to both domestic and international clients. Some of the key services provided include:

1. Data Management and Bookkeeping:

* Maintaining vendor and customer master data.

* Scanning and processing vendor invoices.

* Bookkeeping and preparing/finalizing books of accounts.

* Generating ledger reconciliations.

* Managing customer receivables.

2. Software Development and Maintenance:

* Developing, licensing, and maintaining software tailored to client needs.

The core issue revolves around the classification of these services and the subsequent eligibility for refund claims under the GST framework. The petitioner argues that their services should be considered as “export of services,” which would entitle them to claim refunds on unutilized ITC. The current classification as “Intermediary Services” negates this benefit, leading to the present legal challenge.

The petitioner is a Business Process Outsourcing (BPO) service provider based in India. The challenge in this petition is against the order dated February 15, 2021, issued by the Additional Commissioner of CGST (Appeals) in Gurugram. The order classified the services provided by the petitioner as “Intermediary Services” under Section 2(13) of the Integrated Goods and Services Tax (IGST) Act, rather than “export of services” as defined in Section 2(6) of the same Act. This classification resulted in the rejection of the petitioner’s refund claim for unutilized Input Tax Credit (ITC) used in making zero-rated supplies of services without payment of IGST.

The petitioner is registered with Haryana GST Authorities and provides a variety of BPO services to clients both within India and internationally. These services include:

1. Maintaining vendor/customer master data, scanning and processing vendor invoices, bookkeeping, preparing/finalizing books of account, generating ledger reconciliations, and managing customer receivables.

2. Developing, licensing, and maintaining software according to clients’ needs.

3. Providing technical IT support and troubleshooting services.

4. Analyzing data and offering solutions for demand forecasting, inventory management, and supporting various business functions like sourcing and supply chain management.

The petitioner asserts that these services are delivered on its “own account” from India, utilizing its infrastructure and workforce of around 50,000 employees, remotely through telecommunications and internet links.

The petitioner entered into a Master Services Sub-Contracting Agreement (MSA) on January 1, 2013, with Genpact International Incorporated (GI), an entity located outside India. Under the terms of the MSA, the petitioner provides various services on a principal-to-principal basis. The petitioner is engaged by GI to perform BPO services for GI’s clients located outside India. This arrangement requires the petitioner to directly complete the assigned processes and scope of work for third parties located outside India.

The core of the dispute is the classification of the services provided by the petitioner. The petitioner’s argument hinges on the assertion that their services qualify as “export of services,” which should entitle them to a refund of unutilized ITC. However, the order by the Additional Commissioner CGST (Appeals) classified these services as “Intermediary Services,” thereby disqualifying them from the benefits of zero-rated supply and the corresponding ITC refund.

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