TaxTMI 
TaxTMI 
TaxTMI 
1. Introduction
The judgment of the Supreme Court in The Union of India & Ors. Versus Kc Overseas Education Pvt Ltd Nagpur - 2025 (9) TMI 469 - SC Order has finally settled a long-standing controversy under the Goods and Services Tax law relating to services provided by Indian education consultants to foreign universities. The Court held that such services, when rendered to foreign universities and remunerated in convertible foreign exchange, qualify as “export of services” and are not liable to GST in India.
Following this authoritative pronouncement, a critical question arises for similarly placed taxpayers who had earlier discharged GST on such services: whether refund claims can be filed under section 54 of the CGST Act, 2017, notwithstanding the expiry of the statutory limitation period, and whether Explanation (2)(d) to section 54 can be invoked when the judgment relied upon is not in the claimant’s own case.
This article analyses the issue from a statutory, constitutional and judicial perspective.
2. Nature of Services and Effect of the Supreme Court Judgment
Education consultants in India typically undertake activities such as:
- Promotion and marketing of foreign universities in India;
- Counselling of students and assistance in admissions; and
- Acting as a liaison between students and overseas universities.
The revenue authorities had sought to tax such services by characterising them as intermediary services under section 2(13) of the IGST Act, 2017, thereby denying export status.
In K C Overseas Education Pvt. Ltd., the Supreme Court rejected this approach and held that:
- The recipient of service is the foreign university;
- The services are provided on a principal-to-principal basis; and
- All conditions of “export of services” under section 2(6) of the IGST Act stand satisfied.
The judgment is declaratory in nature and clarifies the correct legal position as it has always existed.
3. Statutory Scheme of Refund under Section 54
3.1 Section 54(1), CGST Act
Section 54(1) permits any person to claim refund of tax, subject to filing an application within two years from the “relevant date”.
3.2 Explanation (2)(d) to Section 54
Explanation (2)(d) defines “relevant date” as:
“In the case where the tax becomes refundable as a consequence of a judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any Court, the date of communication of such judgment, decree, order or direction.”
The provision is designed to address situations where a refund right arises only after adjudication or appellate proceedings.
4. Whether Explanation (2)(d) Applies to Judgments in Other Cases
A literal reading of Explanation (2)(d) suggests that:
- The judgment or order must be communicated to the claimant; and
- Such communication typically occurs where the order is passed in the claimant’s own proceedings.
A precedent judgment of the Supreme Court, though binding under Article 141 of the Constitution, is not individually communicated to taxpayers. Therefore, a strict construction would indicate that Explanation (2)(d) does not automatically extend the limitation period for all similarly placed taxpayers merely because a favourable judgment has been delivered in another case.
From a purely textual standpoint, reliance on Explanation (2)(d) alone to overcome limitation is therefore legally vulnerable.
5. Declaratory Judgments and Retrospective Operation of Law
It is a settled principle that:
- Courts do not make law but declare what the law has always been, unless expressly stated otherwise.
- A Supreme Court judgment, unless made prospective, operates retrospectively.
Accordingly, the declaration in K C Overseas implies that GST was never legally leviable on such export services. The tax collected earlier is thus exposed as tax collected without authority of law.
6. Refund of Tax Collected Without Authority of Law
6.1 Constitutional mandate
Article 265 of the Constitution provides that no tax shall be levied or collected except by authority of law. Retention of an amount collected contrary to law is constitutionally impermissible.
6.2 Judicial position under GST
High Courts, while dealing with refund claims arising from subsequent judicial pronouncements, have consistently held that section 54 cannot be used as a tool to legitimise unconstitutional retention of tax.
Notable authorities include:
- The State of Madhya Pradesh and Another Versus Bhailal Bhai and Others - 1964 (1) TMI 33 - Supreme Court – recognising the right to restitution of illegally collected tax.
- M/s. Comsol Energy Private Limited Versus State Of Gujarat - 2021 (6) TMI 827 - GUJARAT HIGH COURT – holding that section 54 applies only to tax validly leviable under the Act.
- M/s. Lenovo (India) Pvt. Ltd., rep. by its Authorized Signatory Mr. Seiyadou Ahamadou Versus The Joint Commissioner of GST (Appeals-1) O/o. the Commissioner of GST & Central Excise (Appeals-I), The Assistant Commissioner of GST and Central Excise, Division I, Puducherry Commissionerate, The Central Board of Indirect Taxes and Customs, rep. by its Chairman, Union of India - 2023 (11) TMI 774 - MADRAS HIGH COURT – observing that the limitation in section 54 is directory in appropriate cases.
- Louis Dreyfus Company Private Limited Versus The Union Of India and Others, The State of Andhra Pradesh, The Commissioner of Central Tax & Customs (Appeals), The Additional Commissioner (GST Appeals), O/o. The Commissioner of Central Tax & Customs (Appeals), The Deputy Commissioner of Central Tax, Guntur CGST Division, The Assistant Commissioner of Central Tax, Guntur CGST Division - 2025 (8) TMI 989 - ANDHRA PRADESH HIGH COURT – allowing refund based on a Supreme Court judgment in another assessee’s case (Mohit Minerals Ltd.), notwithstanding limitation.
These decisions affirm that refund claims arising from judicial declarations of invalid levy stand on a higher constitutional footing than ordinary statutory refunds.
7. Position of Explanation (2)(d) in Such Refund Claims
While Explanation (2)(d) may not strictly apply to precedent judgments, courts have adopted a substantive approach, recognising that:
- The cause of action for refund effectively arises upon judicial declaration of the correct legal position; and
- Mechanical rejection on limitation defeats constitutional guarantees.
Thus, Explanation (2)(d) may be invoked as a supportive interpretative aid, though the principal basis of refund must remain Article 265 and the doctrine against illegal levy.
8. Practical Implications for Education Consultants
For education consultants affected by K C Overseas:
- Services rendered to foreign universities qualify as exportsand are zero-rated.
- GST paid earlier is not legally payable tax.
- Refund applications under section 54 are maintainable despite limitation objections.
- Filing the refund within a reasonable period from the Supreme Court judgment strengthens the claim on equitable grounds.
- Litigation may be inevitable if departmental authorities reject claims mechanically on limitation.
9. Conclusion
The Supreme Court decision in K C Overseas Education Pvt. Ltd. has significant refund implications for the education consultancy sector. While Explanation (2)(d) to section 54 cannot be mechanically extended to judgments in other cases, the constitutional prohibition against retention of tax collected without authority of law decisively overrides statutory limitation.
Refund claims founded on declaratory judgments of the Supreme Court are legally sustainable, provided they are properly articulated as claims for illegal levy, rather than routine statutory refunds. The evolving GST jurisprudence demonstrates a clear judicial preference for constitutional substance over procedural technicalities.
By: CA. Chitresh Gupta
Mobile: 99103 67918
https://www.linkedin.com/in/ca-chitresh-gupta-22795920/
This article is intended for academic and professional discussion and reflects the legal position emerging from statutory interpretation and judicial precedents.