Supreme Court Verdict: Education Consultancy Classified as Export of Service (2026)
1. The Core Dispute: Agency vs. Independent Export
The dispute focused on whether educational consultants recruitment for foreign universities are “Intermediaries” or “Service Exporters.”
Revenue’s Stand: They argued consultants are Intermediaries under Section 2(13) of the IGST Act, acting as agents between students and universities. This would make the “Place of Supply” India under Section 13(8)(b), attracting 18% GST.
Assessee’s Stand: They argued they provide marketing and recruitment services on a “Principal-to-Principal” basis directly to foreign universities. As the recipient is abroad and payment is in foreign exchange, it is a Zero-Rated Export.
2. The Legal Ruling: Recipient vs. Beneficiary
The Supreme Court, affirming the Delhi High Court’s judgment, established a critical distinction between a beneficiary and a legal recipient:
Legal Recipient: Under Section 2(93) of the CGST Act, the recipient is the person liable to pay the consideration—in this case, the Foreign University.
Beneficiary: While Indian students benefit from the counseling, they are not the legal recipients of the consultancy service.
No “Three-Party” Supply: The Court noted that the consultant supplies services on its own account. It does not merely facilitate a transaction between two other parties (university and student); it performs independent promotional work for the university.
3. Final Order and Refund Mandate
The Supreme Court dismissed the Revenue’s Special Leave Petition (SLP), settling years of industry-wide litigation.
Refund with Interest: The Revenue must refund the tax paid along with statutory interest (as per Section 56).
Timeline: The Court granted the Department an extension of two months to complete the disbursement process.
Legislative Intent: The Court noted that current legislative trends aim to remove the “intermediary” tag from such services to encourage foreign exchange earnings.
Key Takeaways for Service Exporters
Contract Clarity: Agreements should be bipartite and explicitly state that services are rendered on a principal-to-principal basis.
No Fees from Students: A major factor was that the consultancy did not charge students; all consideration flowed from the foreign institutions.
“Intermediary” is Not a Catch-all: The definition must be strictly construed and cannot be used to deny export benefits to genuine service providers.