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The person who is intermediary cannot be considered as exporter of services because he is only a broker who arranges and facilitate the supply of goods or services or both, thus the provision of Section 13(8)(b) r.w. s 2(13) of the IGST Act,2017 are not ultra vires or unconstitutional in any manner

Section 13 of the IGST Act, 2017— Place of Supply of Intermediary Service -– The petitioner is an association comprising of recycling industry engaged in manufacture of metals and casting. The members act as an agent for scrape, recycling companies based outside India and facilitate sale of recycled scrap goods for their foreign principals in India and other countries. The petitioner challenged the constitutional validity of Section 13(8)(b) of the IGST on the ground the same as ultra vires under Articles 14, 19, 265 and 286 of the Constitution of India. The petitioner submitted that the they have no role in actual sale and purchase of recycled scrap as the goods supplied by foreign clients to its purchasers are directly shipped by the foreign client to the Indian or overseas purchaser. The petitioner receives only the commission upon receipt of sale proceeds by its foreign client in convertible foreign exchange. The members of the petitioner association raise invoices upon its foreign client for such commission received by them. Thus, according to the petitioner, the transaction entered into by the members of the petitioner association is one of export of service from India and earning valuable convertible foreign exchange for the same. The petitioner submitted that Section 13(8)(b) of the IGST Act,2017 provides that in case of supply of intermediary service, the services are deemed to have been supplied at the location of the supplier.
Held that:- The Hon’ble High Court held that it being a consistent stand of the respondents to tax the service provided by intermediary in India, the same cannot be treated as export of services under the IGST Act, thus, the provision of Section 13(8)(b) r.w. Section 2(13) of the IGST Act,2017 are not ultra vires or unconstitutional in any manner.—Material Recycling Association Of India Vs. Union of India & 2 Other (S) [2020] 26 TAXLOK.COM 061 (Gujarat)