Educational Consultancy to Foreign Universities Classified as Export of Service
1. Issue
Whether the counseling and recruitment services provided by an Indian educational consultancy to foreign universities qualify as an “Export of Services” under Section 2(6) of the IGST Act, or an “Intermediary Service” under Section 2(13), where the place of supply would be within India.
2. Facts
Nature of Business: The respondent (Global Opportunities Pvt. Ltd.) provides consultancy to Indian students seeking admission abroad. They recommend students to foreign universities and earn a commission from these institutions upon successful enrollment.
Contractual Terms: The respondent operates on a principal-to-principal basis with the foreign institutions. They do not charge any fees to the students.
Refund Claim: The respondent filed for a refund of GST paid on these commissions, treating the supply as a zero-rated “Export of Service.”
Departmental Rejection: The Proper Officer rejected the refund, asserting that the respondent was an “intermediary” (acting as an agent to facilitate supply between students and universities).
Litigation: The Appellate Authority allowed the refund, a decision later upheld by the Delhi High Court. The Revenue challenged this before the Supreme Court.
3. Key Takeaways
Direct Service Provider vs. Intermediary: The Court held that an intermediary merely arranges or facilitates a supply between two parties. Here, the respondent supplied consultancy and marketing services on its own account directly to the foreign university.
Recipient of Service: Under Section 2(93) of the CGST Act, the recipient is the person liable to pay the consideration. Since the foreign university was contractually bound to pay the commission, the recipient was located outside India.
Zero-Rated Supply: The transaction satisfied all five conditions of Section 2(6) of the IGST Act:
Supplier is in India.
Recipient is outside India.
Place of supply is outside India (as per Section 13(2)).
Payment received in convertible foreign exchange.
Parties are not merely establishments of the same person.
Interest on Refund: The Court affirmed the award of statutory interest under Section 56 of the CGST Act, as the refund was delayed beyond the 60-day window from the original application.
Finality of Relief: The Supreme Court dismissed the Revenue’s Special Leave Petition (SLP), providing definitive clarity to the overseas education consultancy industry. It extended the timeline for the Revenue to issue the actual refund by two months from the date of the order.