Case Title: M/s Athene Technologies India LLP v. State of Karnataka & Ors.
Court: High Court of Karnataka, Bengaluru
Petition No.: Writ Petition No. 23286 of 2023 (T-RES)
Date of Judgment: 28 April 2025
Category of Dispute: Refund of IGST – Export of Services – Intermediary Classification
Relevant Sections: Sections 2(13), 2(6), 54 and 56 of the CGST / IGST Act, 2017
Facts (Para 2–4):
The petitioner, M/s Athene Technologies India LLP, engaged in software development services, entered into a Master Services Agreement dated 01.04.2019 with The Athene Group LLC, USA. The petitioner rendered IT and software consultancy services to this foreign entity on a principal-to-principal basis, receiving consideration in US dollars. For April and May 2022, it filed refund claims of ₹76,16,997/- of IGST under Section 54 of the CGST Act. The Assistant Commissioner allowed the refund vide Order-in-Original dated 28.07.2022.
However, the Appellate Authority (OIA No. 188-190/2023-24 dated 01.09.2023) reversed this order, treating the petitioner as an intermediary under Section 2(13) of the IGST Act and rejecting the refund. Aggrieved, the petitioner approached the High Court.
Questions of Law:
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Whether the petitioner’s software development services to The Athene Group LLC, USA constituted “intermediary services” under Section 2(13) of the IGST Act?
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Whether such services qualified as export of services eligible for refund under Section 54 of the CGST Act read with Section 2(6) of the IGST Act?
Observations (Para 5–6):
The Court relied extensively on its earlier ruling in Columbia Sportswear India Sourcing Pvt. Ltd. v. Union of India (W.P. No. 12116/2024, dated 26.04.2025), which had elaborated the legal distinction between an “intermediary” and an independent service provider. The Court summarized that an intermediary must:
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Act as a broker or facilitator between two parties;
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Arrange or mediate supplies not on his own account; and
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Exhibit a triangular relationship involving at least three parties.
In contrast, where a person provides services on his own account to a recipient located outside India, the supply qualifies as export of services.
Examining the Agreement (Clause 10), the Court found that the petitioner was an independent contractor, not acting on behalf of Athene Group LLC. The petitioner was responsible for delivering its own services, and there was no element of facilitation or brokerage between Athene and its clients. Thus, the arrangement was principal-to-principal, and not one of agency or intermediary.
Judgment (Para 7):
The Court allowed the writ petition, holding that:
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The petitioner’s services were not intermediary services under Section 2(13) of the IGST Act;
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The Order-in-Appeal dated 01.09.2023 was quashed;
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The Order-in-Original dated 28.07.2022, granting refund, was restored; and
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The Department was directed to release the refund along with interest under Section 56 of the CGST Act within three months.
Summary of Cases Referred:
| Case Name | Court | Issue | Verdict / Ratio |
|---|---|---|---|
| Columbia Sportswear India Sourcing Pvt. Ltd. v. UOI (W.P. No. 12116/2024, 26.04.2025) | Karnataka HC | Whether sourcing services for overseas entity constitute intermediary services | Held not intermediary; services qualify as export under Section 2(6) of IGST Act. Refund directed. |
| Amazon Seller Services Pvt. Ltd. v. CCE | Karnataka HC | Scope of “intermediary” under GST law | Clarified that intermediary must arrange or facilitate supply between two parties and not supply on own account. |
Between Fine Lines:
The ruling reinforces that software development and IT support services provided directly to a foreign client are not intermediary services merely because the foreign entity uses such output for its customers. Exporters of IT/ITES must ensure their agreements reflect independent contractor status and absence of facilitation roles, as this determines eligibility for zero-rated benefits and refund of IGST under Section 54.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
