Customer’s customer is not your customer:
Often services are supplied by supplier of services to third party on behalf of your customer. In that case, it is to be remembered that as far as the supplier of service is concerned, the third party is not his customer. The supplier of service is not providing any service to third party. He is providing service to his customer and that customer is providing service to third party.
In Vodafone Essar Cellular Ltd. v. CCE (2013) 39 STT 777 = 33 358 (CESTAT), it has been observed that your customer’s customer is not your customer. For example, when a florist delivers a bouquet on your request to your friend for which you make payment, as far as florist is concerned, you are the
customer and not your friend – followed in CST v. Bayer Material Science (2014) 48 GST 568 = 51 222 (CESTAT SMB).
In ABS India Ltd.v. CST (2008) 17 STT 223(CESTAT), assessee had subsidiary company in Singapore. Assessee-company booked orders in India for sale of goods manufactured by subsidiary in Singapore. Assessee received commission from its Singapore subsidiary. It was held that service was delivered to
subsidiary. It cannot be said that service is delivered in India.
In Universal Services India Pvt Ltd. In re (2016) 91 VST 483 (AAR), the assessee was providing payment processing service to WWD US on principal to principal basis. These services were for domain registration, web hosting, transfer services etc. WWD US was providing the services to Indian customers and payment was made by Indian customers directly to WWD US. It was held that applicant is not providing any service to Indian customers. It was also held that as per rule 3 of POPS, the place of provision of service is outside India and hence service tax is not payable – same view in Godaddy India Web Services Pvt. Ltd. In re (2016) 92 VST 1 (AAR).