Gujarat High Court Rules in Favor of Infodesk India Pvt. Ltd. on GST Refund Claim

Services to Parent Company Classified as Export, Not Intermediary, Entitling Refund

Ahmedabad, November 27, 2025 - In a significant ruling, the Gujarat High Court has delivered a judgment in favor of Infodesk India Pvt. Ltd., a wholly-owned subsidiary of Info Desk, Inc., USA, confirming that services provided to its parent company qualify as "export of services" under the Integrated Goods and Services Tax (IGST) Act, 2017. This decision overturns the previous denial of a GST refund claim by the tax authorities.

The Division Bench comprising Justice A.S. Supehia and Justice Pranav Trivedi heard the case presented by Infodesk India Pvt. Ltd., which challenged the orders of the tax authorities that had classified the services rendered as "intermediary services" under Section 2(13) of the IGST Act, rather than "export of services" under Section 2(6).

The core issue revolved around whether the software consultancy services provided by Infodesk India to its parent company, under a bipartite agreement, constituted intermediary services. The company had appealed against the rejection of its refund application, which was originally based on the premise that the services were intermediary in nature and thus subject to GST.

Infodesk India Pvt. Ltd., represented by Advocate Anand Nainawati, argued that the services were provided on a principal-to-principal basis directly to its parent company, without facilitating third-party transactions. The court agreed, emphasizing that the company operated independently, providing services directly and earning profits, which excluded it from the definition of an intermediary.

The court also addressed the procedural aspect of the refund claim, ruling that the electronic filing date should be considered for the limitation period, dismissing the argument that the delay in submitting physical documents invalidated the claim.

This ruling aligns with previous judgments from other high courts, including those in the cases of Genpact India Pvt. Ltd. and M/s. Ernst and Young Limited, which established that services provided directly to a foreign parent company without intermediary involvement qualify as export services.

The Gujarat High Court has directed the tax authorities to process the refund claim as per the law, recognizing the services as export, and to complete the process within twelve weeks. This decision is a precedent for other similar cases, potentially impacting numerous subsidiaries involved in international service provision.

Bottom Line:

In the context of GST laws, services provided by a wholly owned subsidiary to its parent company on a principal-to-principal basis cannot be classified as "intermediary services" under Section 2(13) of the IGST Act, 2017, but qualify as "export of services" under Section 2(6) of the IGST Act, 2017.

Statutory provision(s): Integrated Goods and Services Tax Act, 2017 Sections 2(6), 2(13), 16; Central Goods and Services Tax Act, 2017 Section 54(1).

Infodesk India Pvt. Ltd. v. Union of India, (Gujarat)(DB) : Law Finder Doc Id # 2820212