Facts of the Case:

In this case, the appellant based in Haryana, was engaged by M/s Meteora Consulting Sdn. Bhd., Malaysia, under a service agreement to provide sales and marketing consulting services and manpower/HR consulting services in India.

Meteora Consulting was itself engaged in providing consulting services to an Indian company, M/s Modenik Textiles Pvt. Ltd. Under the agreement, the appellant was required to provide “on-the-ground market services” and work with the local client’s team in India whenever required. The appellant contended that it was providing independent consulting services directly to Meteora on a principal-to-principal basis, receiving consideration in convertible foreign exchange, and therefore the services qualified as export of services under Section 2(6) of the IGST Act, 2017.

Consequently, it claimed that the supplies were zero-rated and eligible for refund of unutilized input tax credit. The Haryana Authority for Advance Ruling, however, held that the appellant was acting as an intermediary facilitating the supply of services by Meteora to its Indian client and, therefore, the services did not qualify as exports. Aggrieved by the ruling, the appellant preferred an appeal before the Appellate Authority for Advance Ruling (AAAR), Haryana.

Issue:

Whether the services provided by the appellant to the Malaysian entity qualified as “export of services” under Section 2(6) of the IGST Act, 2017. Whether such services were liable to be classified as “intermediary services” under Section 2(13) of the IGST Act. Also, whether the place of supply was outside India under Section 13(2) or within India under Section 13(8)(b) and consequently whether the appellant was entitled to zero-rated supply benefits and refund of accumulated input tax credit.

Held That:

The Appellate Authority upheld the ruling of the Haryana AAR and held that the services supplied by M/s Maithani Enterprises were in the nature of intermediary services as defined under Section 2(13) of the IGST Act, 2017. The Authority observed that there existed three distinct parties in the transaction, namely the appellant, Meteora Consulting (Malaysia), and the Indian client, Modenik Textiles Pvt. Ltd. It found that the appellant’s role was not that of an independent service provider but was integrally connected with Meteora’s consulting engagement with the Indian client. Particular reliance was placed on the contractual clauses requiring the appellant to provide “on-the-ground market services” and work with the local client’s team, which demonstrated that the services were performed in India and facilitated Meteora’s supply to its Indian customer. The Authority also drew support from the clause requiring the appellant to be bound by the same confidentiality obligations as Meteora vis-à-vis the client, treating it as indicative of a principal-agent type relationship.

Having concluded that the appellant was arranging or facilitating the supply of services between Meteora and its Indian client, the Authority held that the services squarely fell within the ambit of intermediary services. Consequently, by virtue of Section 13(8)(b) of the IGST Act, the place of supply was held to be the location of the supplier, i.e., India. Since one of the essential conditions for export of services under Section 2(6), namely that the place of supply must be outside India, was not satisfied, the services could not be treated as exports. The Authority therefore ruled that the supplies were taxable in India at the applicable rate of 18% IGST and did not qualify as zero-rated supplies under Section 16 of the IGST Act. As a result, the appellant was held ineligible to claim refund of unutilized input tax credit attributable to such supplies.

Case Name: In re Maithani Enterprises, dated 07.05.2026

To read the complete judgement 2026 Taxo.online 1486