INTRODUCTION:

In the case involving Infodesk India Private Limited v. Union of India and Ors., the Gujarat High Court delivered a significant judgment on 27 November 2025 addressing whether software consultancy, content integration, editorial activities, and customer support services rendered by Infodesk India Private Limited—an Indian subsidiary—to its parent company Infodesk Inc., USA, would be categorized as “intermediary services” or qualify as “export of services” under the GST regime, while also examining the correctness of refund rejection orders passed by lower GST authorities. The petitioner, represented by Advocates Anand Nainawati and Deepak N. Khanchandani, approached the High Court due to the absence of the GST Appellate Tribunal and challenged the appellate authority’s decision that upheld the rejection of refund on two grounds: first, that the refund claim was allegedly barred by limitation under Section 54 of the CGST Act, and second, that the activities undertaken by the petitioner constituted intermediary services under Section 2(13) of the IGST Act. The respondent authorities, represented by Advocate Param Shah, defended the rejection order, asserting that the petitioner was merely facilitating supply between its parent company and global clients. Against this background, the High Court was required to interpret complex contractual relationships, statutory definitions, and established GST precedents to determine whether the petitioner’s services were provided as an independent service provider or as an intermediary, and whether its refund claim was within the statutory period. This judgment carries pivotal implications for India’s IT/ITeS sector, especially entities providing backend support, editorial services, and AI-driven content customization to foreign affiliates.

ARGUMENTS ON BEHALF OF THE PETITIONER:

The petitioner Infodesk India Private Limited submitted that it is a wholly owned subsidiary incorporated exclusively for fulfilling technical, editorial, content-processing, customer support, and IT infrastructure management requirements of its parent company Infodesk Inc. in the United States. According to the petitioner, its business model was straightforward: it rendered software consultancy and content creation services directly to its parent company on a principal-to-principal basis, raised invoices in convertible foreign exchange, and received payments accordingly, thereby fulfilling all statutory conditions of “export of services” under the IGST Act. The petitioner emphasized that it did not facilitate or arrange any supply between its parent company and third-party clients, and that all services were provided directly and exclusively to Infodesk Inc. Thus, there was no element of “intermediation” or “brokerage”. The petitioner further relied heavily on CBIC Circular No. 159/15/2021-GST dated 20 September 2021, which clarified that services qualify as intermediary only when a service provider arranges or facilitates a supply between two other persons and does not supply such services on its own account. The petitioner argued that the entire gamut of services it provided—including editorial functions, smart data integration using AI tools, customer support, and custom usage report generation—were substantive services rendered independently and not mere facilitation activities. It further argued that content integration, insight creation, and curation activities were part of the core products/services of the parent company and did not constitute arranging or brokering. On limitation, the petitioner asserted that the authorities erred in calculating limitation from the physical filing date instead of the date of online submission on the GST portal, and since the portal recorded the claim within the statutory two-year period, the rejection was contrary to statutory interpretation and judicial precedents. The petitioner placed reliance on judgments such as Genpact India Pvt. Ltd. v. Union of India (Punjab & Haryana High Court, 2022) and Ernst & Young Ltd. v. Addl. Commissioner of CGST Appeals-II, Delhi (Delhi High Court, 2023), which clarified that backend support services rendered on a principal-to-principal basis fall under the category of export of service and do not qualify as intermediary services.

ARGUMENTS ON BEHALF OF THE RESPONDENT:

The respondent tax authorities contended that the petitioner acted as a link between its parent company and global clients by providing support services, content processing, expert coordination, and customer interaction, which, according to them, constituted “arranging” and “facilitating” services under Section 2(13) of the IGST Act. They argued that the contractual clauses suggested that the petitioner was engaged in coordinating with experts, scheduling consultations, and enabling interactions between consultants, clients, and the parent company, thereby falling squarely within the statutory definition of intermediary. The authorities further asserted that since the petitioner was not the principal supplier of the final service/product to third-party customers but was merely supporting the supply chain, it should be classified as an intermediary and thus excluded from the definition of export of services. On limitation, the respondents argued that the statutory period under Section 54(1) begins from the relevant date and that the petitioner failed to submit physical documentation within the prescribed period, and that online filing alone cannot extend or modify statutory timelines. Therefore, according to the authorities, the refund rejection was justified.

COURT’S JUDGMENT:

The Division Bench of Justice A.S. Supehia and Justice Pranav Trivedi of the Gujarat High Court emphatically rejected the reasoning adopted by the lower authorities and quashed the refund rejection order. The Court examined the service agreement between the petitioner and Infodesk Inc. and held that the contractual relationship was clearly bipartite, meaning that services were exchanged exclusively between two parties—the Indian subsidiary and the US parent—with no third-party involvement in the form required for classifying a service provider as an intermediary. The Court reiterated the settled legal position that the hallmark of an intermediary relationship is the presence of three distinct parties, where the intermediary merely facilitates the transaction between the principal supplier and end recipient. In this case, the petitioner delivered substantive output in the form of IT solutions, content creation, editorial work, customer reports, and AI-integrated “smart data” processing, all of which clearly constituted services provided on its own account. The Court observed that the petitioner functioned as an independent professional entity and not as a broker, agent, or facilitator. It relied upon CBIC Circular No. 159/15/2021-GST, noting that the circular expressly clarified that backend and support services provided on a principal-to-principal basis to foreign clients do not amount to intermediary services. The Court also placed reliance on Genpact India Pvt. Ltd. and Ernst & Young Ltd., where similar services were held to be exports. Importantly, the High Court clarified that smart data integration and content curation using AI techniques constitute substantive inputs and value addition forming part of the principal supply and cannot be downgraded to auxiliary or facilitation services. On the issue of limitation, the Court ruled in favour of the petitioner, holding that online filing of refund applications must be treated as the actual date of filing and that procedural lapses relating to physical submission should not defeat substantive rights. The Court observed that the petitioner had submitted all documentation within the portal timelines and the authorities erred in applying a narrow, hyper-technical interpretation of limitation. Consequently, the Court directed the authorities to process the refund claim relating to IT infrastructure management, content creation, customer support, and customized reporting services without further delay and held that all such services constituted export of services, not intermediary services. The Court concluded that the petitioner rendered services on a principal-to-principal basis and was therefore fully entitled to refund of accumulated Input Tax Credit.