Vodafone Idea to Get Refund for IGST Paid for International IIR and ILD Services

Vodafone Idea, the third-largest telco in the country, is going to get an Integrated Goods and Services Tax (IGST) refund for the international Inbound Roaming Services (IIR) and International Long Distance (ILD) services. The decision was announced by the Bombay High Court, which ruled that the IRR and ILD services provided by Vodafone Idea are basically export of services.

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According to a Livelaw report, the bench consisting of Justices K. R. Shriram and Milind N. Jadhav observed that the telco had entered into trade agreements with the Foreign Telecom Operators (FTOs) for IIR and ILD services, and there was no mention of any agreement with the subscribers of the FTOs. Thus, the agreement is set between Vodafone Idea and the FTOs, and the service provided by Vi is direct to FTOs which the court has considered an export of services.

The court noted that provisions of Section 13(2) of the IGST Act were applicable here and said that the location of the supply of service was the location of the FTOs, which is outside India. Vodafone Idea had claimed a refund of IGST paid on the international IRR and ILD service, but the revenue authorities had rejected the claim made by the telco.

Revenue Authorities Against the Claim Made by Vodafone Idea

As per the revenue authorities, the refund claims of Vodafone Idea were not correct as the supply of services provided by Vodafone Idea was in the state of Maharashtra, and thus, it can’t be considered as an export of services.