Overseas BSS Not Intermediary – ITC Refund Allowed | HC

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ITC refund intermediary

Case Details: Li and Fung (India) (P.) Ltd. vs. Union of India [2026] 182 taxmann.com 724 (Karnataka)

Judiciary and Counsel Details

  • S.R. Krishna Kumar, J.
  • Tarun Gulati, Senior Counsel & Parashuram A. L., Adv. for the Petitioner.
  • Smt. Jyoti M. Maradi, HCGP & Aravind V. Chavan, Adv. for the Respondent.

Facts of the Case

The petitioner was engaged in providing business support services to its overseas group entity located outside India. It provided export of services as per the service agreement entered into with its Hong Kong-based group company, contending that it was not an ‘intermediary’ and was entitled to a refund of accumulated/unutilized input tax credit (ITC) available in the electronic credit ledger on account of export of services without payment of IGST. The petitioner’s refund application was rejected by the authorities. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the petitioner was not an ‘intermediary’ and was engaged in the export of services under the service agreement with the Hong Kong-based group company. The Court held that the petitioner was entitled to a refund of the accumulated/unutilized ITC available in the electronic credit ledger under Section 54 of the CGST Act and the Karnataka GST Act. The Court also held that the authorities’ rejection of the refund application was unsustainable. It directed the concerned authorities to grant/sanction the refund of accumulated/unutilized ITC together with applicable interest.

List of Cases Reviewed

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied