The Delhi High Court has directed the government to refund telecom company Vodafone Idea the integrated tax of Rs 7.12 crore that it had paid on the export of international roaming and long-distance services. The court held that the services provided by Vodafone Idea to foreign telecom operators during their visit to India qualified as export of services. The ruling was based on the similarity between the provisions for ascertaining the place of supply of services under Rule 6A of the ST Rules and Section 2(6) of the IGST Act.
The Division Bench comprising Justice Vibhu Bakru and Amit Mahajan observed that the services would be treated as export of services when the provider of service is located in the taxable territory, the recipient of the service is located outside India, and the place of provision of the service is outside India.
The High Court also mentioned that the Customs Excise and Service Tax Appellate Tribunal (CESTAT) has, in several cases, allowed appeals by the petitioner (Vodafone India Ltd.) and directed the refund, following the same decision. The judgment noted that the predecessor of the petitioner had prevailed before the tribunal on the question of whether the services in question qualified for export services, further supporting Vodafone Idea’s claim for a refund.
Earlier this year, the Delhi High Court had issued a notice to the Finance Ministry and others regarding Vodafone Idea’s plea for a refund of the integrated tax paid on international roaming and long-distance services provided to foreign telecom operators during their visit to India.
Vodafone Idea argued that its telecom services, including International Inbound Roaming Services (IIR) and International Long Distance Services (ILD) offered to Foreign Telecom Operators (FTOs) subscribers during their visit to India, are considered export of services under the Integrated Goods & Services Tax Act, and are zero-rated supplies.
The Delhi High Court’s order for the refund of the integrated tax provides relief to Vodafone Idea and sets a precedent for future similar cases. The ruling clarifies the conditions under which telecom services offered to foreign telecom operators during their visit to India can be considered as export of services.
