Facts of the Case:

The petitioner was engaged in providing clinical trial–related services and allied data management services to its foreign affiliate, IQVIA Holdings Inc., USA, under a Master Service Agreement. The services included data processing, analysis, and management connected with clinical trials conducted for overseas entities. For different tax periods July 2017 to March 2018, and April 2019 to March 2020, the petitioner treated such supplies as export of services, claiming them as zero-rated supplies under Section 16 of the IGST Act, 2017, contending that the recipient of services was located outside India, and the place of supply was the location of the recipient, i.e., outside the taxable territory.

However, the tax authorities passed adjudication and appellate orders treating the said services as intra-State supplies, held that the place of supply was in India, rejected zero-rated turnover, alleged overstatement of ITC, and consequently demanded GST along with interest and penalty. These orders were challenged before the High Court by way of writ petitions.

The petitioner confined its challenge only to the portion of the demand relating to data management services, and not to other unrelated demands.

Issue:

Whether data management services provided by the petitioner in India to its foreign affiliate located in the USA qualify as export of services, with the place of supply being outside India, thereby not exigible to GST under the IGST Act, 2017?

Held that:

The Court noted that the petitioner had entered into a Master Service Agreement with its foreign parent company situated in the USA, and the nature of services rendered clearly fell within the scope of services on software and data management. The Court placed significant reliance on Circular No. 209/1/2018-ST dated 04.05.2018, particularly paragraph 3.2, which clarifies that in cases of services involving testing, debugging, modification, customisation, adaptation, upgradation, enhancement, and implementation of information technology software, the place of provision of service is the location of the recipient of service.

Upon examining the agreement and the nature of activities carried out by the petitioner, the Court concluded that the services provided were in the nature of data management services, squarely covered by the aforesaid circular. Since the recipient of services was located outside India, the place of supply was outside the taxable territory, and therefore, the services constituted export of services.

Accordingly, the Court held that the levy of GST on such data management services was contrary to law. The impugned orders passed by the adjudicating and appellate authorities, to the extent they demanded GST on data management services, were found to be without application of mind and legally untenable.

Consequently, the Court quashed the impugned orders insofar as they related to the demand of GST on data management services provided by the petitioner to its foreign affiliate.

Case Name: M/s. Iqvia RDS (Inida) Private Limited Versus Union of India Through The Secretary Ministry of Finance (Department of Revenue), The State of Karnataka, The Central Board of Indirect Taxes And Customs New Delhi, The Deputy Commissioner of Commercial Taxes, (Audit) -4. 4, Bangalore, Joint Commissioner of Commercial Taxes (Appeals) -4. dated 08.12.2025.

To read the complete judgement 2025 Taxo.online 3467