Promotion services to foreign universities ruled taxable as intermediary services under Section 2(13) IGST Act

The AAAR, West Bengal dismissed the appellant's challenge to an advance ruling regarding export of services classification. The appellant provided promotion services to foreign universities and claimed they were not intermediaries, thus not liable for service tax. The AAAR held that the appellant functioned as an intermediary under Section 2(13) of the IGST Act, as they promoted university courses, identified prospective students, and assisted in recruitment. The fee structure was tied to student admissions rather than promotional expenses. The services were ruled taxable and not classified as export of services under GST Act.

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Issues:
Determining liability to pay goods and services tax on output services - Whether services qualify as 'Export of Services' under the GST Act - Classification of the Appellant as an 'intermediary' of Foreign Universities.

Analysis:
The Appellant, a Private Limited Company promoting courses of Foreign Universities in India, appealed against the West Bengal Authority for Advance Ruling's decision classifying them as an 'intermediary' service provider. The Appellant argued they provided 'business auxiliary services' by marketing and promoting courses, not acting as recruitment agents. They referenced an agreement with Australian Catholic University outlining their responsibilities, emphasizing marketing and promotion activities. The Appellant compared their case to a ruling involving GoDaddy India, highlighting the distinction between providing services on their own account versus as an intermediary.

The Appellant also cited a case involving Sunrise Immigration Consultants, where the Tribunal differentiated between facilitating services and providing the main service. The Tribunal found the Appellant's role to be promoting the business of their clients, not directly providing the main services of education or loans. The Tribunal's interpretation of 'intermediary' under the Place of Provision of Services Rules was discussed, emphasizing the distinction between arranging services and providing them directly.

The Appellate Authority upheld the West Bengal Authority for Advance Ruling's decision, considering the Appellant as an intermediary under the IGST Act. The Authority concluded that the services provided did not qualify as 'Export of Services' under the GST Act and were subject to taxation. The Appeal was dismissed, affirming the original ruling. A copy of the order was directed to be sent to the Appellant for information.

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