Placement facilitation by an educational institution is outside manpower recruitment service when fees are charged only from students.

Placement facilitation by an educational institution was held not to fall within Manpower Recruitment or Supply Agency Service where fees were collected from students and not from recruiting employers. The charging provision was read as requiring a client-service provider relationship involving recruitment or supply of manpower, with consideration flowing from the employer or prospective employer. On the facts stated, students were not the clients contemplated by the levy, and the activity was limited to facilitating interaction between students and employers. The circular relied on by the Revenue could not expand the scope of the charging provision, so the demand was treated as unsustainable.

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Issues: Whether facilitation of campus placement by an educational institution, where placement-related fees are collected from students and not from recruiting employers, falls within "Manpower Recruitment or Supply Agency Service" under Section 65(105)(k) of the Finance Act, 1994 read with Circular No. 96/7/2007-ST dated 23.08.2007.

Analysis: The taxable entry contemplates a service rendered to a client in the nature of recruitment or supply of manpower, and the essential feature is a service-provider and client relationship with consideration flowing from the employer or prospective employer. On the facts found, the appellant only facilitates interaction between students and prospective employers and collects fees from students. No consideration is received from recruiting entities, and the students are not the clients contemplated by the charging provision. The circular relied on by the Revenue cannot enlarge the scope of the charging provision, and the activity does not satisfy the ingredients of the taxable service.

Conclusion: The activity does not fall within the ambit of "Manpower Recruitment or Supply Agency Service", and the demand is unsustainable.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Placement facilitation by an educational institution is not taxable as manpower recruitment or supply service when the consideration is collected from students and not from employers, because the charging provision requires a client-employer relationship and cannot be expanded by circular instructions.

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