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

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.

Highlights

  • The decision was announced by the Bombay High Court which ruled that the IRR and ILD services provided by Vodafone Idea is basically 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.
  • The revenue authorities said that the customers of the FTOs are actually travelling to India and consuming services here.

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Vodafone Idea

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.

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.

The revenue authorities said that the customers of the FTOs are actually travelling to India and consuming services here. Thus, the claims of Vodafone Idea that it is exporting service internationally is wrong as the supply of services is done within India itself.

But the Bombay High Court has ruled that the supply of services is to FTOs and not the consumers. Since the FTOs are based out of India, it will be considered an export of services.

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