2023 (10) TMI 503 - AT - Service Tax

Appeal allowed for export services, not intermediaries. Appellant must provide foreign remittance certificates for refund.

The Tribunal allowed the appeal, determining that the appellant's services qualified as export of services and that they were not considered ... Export of services - place of provision of services - intermediary - receipt of consideration as essential element of service - refund of wrongly paid service tax subject to production of foreign inward remittance certificatesExport of services - receipt of consideration as essential element of service - Whether the appellant's activity of guiding prospective students amounted to a service provided to those students or constituted export of services to foreign universities - HELD THAT: - The Tribunal found that the appellant did not charge or receive any consideration from prospective students and therefore, having regard to the definition of service, was not providing a service to the students in India. The consideration was received from foreign universities which engaged the appellant and paid commission to it. On this basis the Tribunal held that the services in question were services provided to the foreign universities and, accordingly, qualified as export of services. [Paras 5]Appellant was not providing service to prospective students; the services are export of services to foreign universities.Place of provision of services - intermediary - Whether the appellant could be treated as an intermediary under Rule 2(f) of the Place of Provision of Services Rules, 2012 - HELD THAT: - Having examined the nature of the appellant's activities and having regard to the Tribunal's earlier decision in Sunrise Immigrations Consultants Pvt. Ltd., the Tribunal held that organisations undertaking similar activities could not be treated as intermediaries under Rule 2(f). The Revenue's contention that the appellant functioned as an intermediary was rejected as not being in accordance with law. [Paras 5]Appellant is not an intermediary under Rule 2(f); the revenue's intermediary contention is rejected.Refund of wrongly paid service tax subject to production of foreign inward remittance certificates - Adjudication of the appellant's refund claim after partial waiver and requirement for proof of foreign receipts - HELD THAT: - The appellant voluntarily chose not to press the refund claim for the period(s) they identified (forfeiting a specified portion of the claim). As to the remaining refund claim, the Tribunal observed that the appellant had not produced all foreign inward remittance certificates (FIRCs) for the transactions corresponding to the balance refund amount. The Tribunal therefore remanded the matter to the original authority with a narrowly confined direction: the authority must not raise other issues but should collect the FIRCs from the appellant in respect of the transactions comprising the remaining refund claim and allow refund only where FIRCs are produced. [Paras 4, 5, 6]Appeal allowed by remand: original order set aside and matter remitted to the original authority to verify FIRCs and grant refund insofar as FIRCs are produced for the remaining claim.Final Conclusion: The Tribunal held that the appellant's activities were exports of services to foreign universities and not services to Indian students, rejected the Revenue's intermediary contention, recorded the appellant's waiver of part of the claim, set aside the impugned order and remanded the matter to the original authority to verify foreign inward remittance certificates and allow the balance refund only in respect of transactions where such evidence is produced. Issues involved:The issues involved in the judgment are whether the appellant's services qualify as export of services, whether the appellant can be considered an intermediary under the Place of Provision of Services Rules, 2012, and whether the appellant is eligible for a refund of service tax.Export of Services:The appellant, engaged in guiding students seeking admissions in foreign universities, claimed that their services were export of service as they did not collect consideration from prospective students. The appellant filed a refund claim for the service tax paid, contending that their services were provided outside India. The original authority rejected the refund claim. The appellant argued that they were not providing services to Indian students but to universities abroad, making their services export of services. The Tribunal held that the appellant's services were indeed export of services, citing a similar case precedent.Intermediary Status:The Revenue contended that the appellant functioned as an intermediary under Rule 2(f) of the Place of Provision of Services Rules, 2012. The appellant, however, argued that they were not intermediaries as they did not receive consideration from prospective students. The Tribunal referred to a previous case where similar organizations were not considered intermediaries. The Tribunal held that the Revenue's contention that the appellant was an intermediary was not in accordance with the law.Refund Claim:The Revenue argued that the appellant was not eligible for a refund as they had not revised their ST-3 return for a specific period. The appellant later submitted a letter agreeing to forego a part of the refund claim. The Tribunal noted that the appellant had foregone a portion of the refund claim and reduced the refund amount accordingly. The Tribunal remanded the matter to the original authority to collect foreign inward remittance certificates for the remaining refund amount and allowed the refund upon submission of the required certificates.Decision:The Tribunal allowed the appeal by way of remand, holding that the appellant's services were export of services and that they were not intermediaries as per the law. The Tribunal directed the appellant to produce all necessary foreign inward remittance certificates to receive the refund amount. The impugned order was set aside for this purpose.