TaxTMI 
TaxTMI 
2024 (3) TMI 1178
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....s engaged in rendering services to overseas educational universities by enrolling prospective students for overseas admissions for which they had executed agreements with different foreign universities, located in Australia and New Zealand, for getting the students from India. The appellant received commission for their services from these foreign universities in convertible foreign exchange. The recipient of service (foreign universities) are located outside India and the benefit of service also accrues outside India. The appellant was authorised by the foreign universities for recruitment of students in various courses. The appellant assisted the students to get admission in these foreign universities and also advised them regarding the payment of tuition fees and associated fees required for study and also provided information as to the options available for their accommodation in these countries and about their departure from their home, country and arrival in the country of destination etc. 4. Show cause notice dated 25.09.2017 was issued to the appellant for the period 1.07.2012 to March 2016 treating the services rendered by the appellant as "intermediary services" which ....
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.... costs and ensuring payment of the requisite fees to the Universities if the propsective students decide upon pursuing any course so promoted by them. 7. Having heard the parties at length we need to consider the applicability of the provisions of "export of service" and "intermediary service." "Export of Service" 8. The appellant in support of his submission that prior to 1.07.2012 the services rendered by them were treated as export of service referred to the provisions of Export of Service Rules, 2005 (ESR, 2005) issued by the Central Government in exercise of powers under Section 93 and 94(2)(f) of the Act. Rule 3(2) of ESR, 2005 provided that the provisions of any taxable service specified in sub rule (1) shall be treated as "export of service" when the conditions are satisfied that such service is provided outside India and the payment for such service is received by the service provider in convertible foreign exchange. Rule 4 provided that any service which is taxable under clause 105 of Section 65 of the Act may be exported without payment of service tax. The issues regarding taxability of services provided from India and used outside India were clarified by the CB....
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....lace where the event is actually held. 9. Place of provision of specified services - The place of provision of following services shall be the location of the service provider:- (a) Services provided by a banking company, or a financial institution, or a non-banking financial company, to account holders; (b) " ****;" omitted vide Notification 46/2016-Service Tax (c) Intermediary services; (d) Service consisting of hiring of means of transport other than, - (i) aircrafts, and (ii) vessels except yachts up to a period of one months." Rule 3 of PPSR 2012, provides the place of provision of a service as the location of the recipient of service. Rule 6 provides the place of provision of service relating to events as the place where the event is actually held. In terms of rule 9 the place of provision of specified service shall be the location of the service provider and under sub rule (c) refer to "intermediary service". The said rules do not describe export of service. The provision for export of service was separately provided by Notification No. 36/2012 dated 20.06.2012 whereby Rule 6A was introduced by the Service Tax....
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.... the name or reputation of the Principal into disrepute or prejudice the interests of the business of the Principal." b. ............ c. At all times promptly to the Principal (in such manner as the Principal may request), all information, explanations and assistance, as it may require, in connection with the services; d. ................. e. Assist with the screening and selection of appropriate students who meet the entry criteria of the Principal. f. Inform students of the enrolment, refund and withdrawal policy of the Principal. g. ........... h. ........... i. ............ j. Invoice the Principal for each student the Consultant is claiming commission for k. Provide follow-up support service and liaison with student's families as requested by the Principal. l. Assist students in applying for relevant student visas and ensure all necessary information is provided to the New Zealand Immigration Service. m. Ensure that students arrive in New Zealand prior to their course start date." 11. The agreements with other universities are broadly similar in material aspects for p....
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....recipient of the service is determined by the contract between the parties and who has the contractual right to receive the service and who is responsible for the payment for the service and the department has lost sight of this essential difference. The High Court of Delhi then considered the decision of the Larger Bench of the Tribunal in Paul Merchants Ltd. Vs. CCE, Chandigarh - 2012 (12) TMI 424-CESTAT-DEL.-LB which was rendered with reference to ESR, 2005 where the assessees were intermediary agents, providing money transfer services to foreign travellers, who were the end user on behalf of their principals and the contention of the department that this did not qualify as export of service was rejected referring to the CBEC clarification letter no. 334/1/2019-TRU dated 26.02.2010 that as long as the party abroad is deriving benefit from service in India, it is an export of service. The relevant paras of the decision in Verizon Communication India Private Limited (supra) is quoted as under:- "51. In the considered view of the Court, the judgment of the CESTAT in Paul Merchants Ltd. v. CCE, Chandigarh (supra) is right in holding that "The service recipient is the p....
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....at these services were provided from India and used outside India. 15. Lastly, we would like to refer to the decision of the Delhi High Court in Indian Associaton of Tour Operators Vs. Union of India - 2017 (5) GSTL 4 (Delhi) holding that service provided by Indian Tour Operator to Foreign Tourists during the period 01.07.2012 to 01.07.2017, which has been paid for in convertible foreign exchange would not be amenable to service tax. While holding Rule 6-A(1) and (2) of the Service Tax Rules as ultra vires and invalid, in so far as it seeks to describe export of tour operator services to include non-taxable services provided by tour operators, it has been held that services rendered outside taxable territory of India are not amenable to service tax by virtue of Section 66B read with Section 65(51), 65(52) and 64(1) and 64(3) of the Finance Act, 1994, the relevant para is quoted below: "48 As already noticed since by virtue of Section 64(3) the whole of Chapter V applies only to taxable services, and Section 66C of the FA falls in that very Chapter, the rules made by the Central Government under Section 66C has to necessarily be only in relation to taxable service viz. s....
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....cipients located outside India and therefore the place of provision of service shall be the place where the event is actually held. On the other hand, "intermediary services" are broader category and is not applicable to specific category. We find force in the submission of the learned counsel. 18. Further, the Chandigarh Bench in Sunrise Immigration Consultants Private Limited Vs Commissioner of Central Excise and Service Tax, Chandigarh - 2018-TIOL-1849-CESTAT-CHD considered the issue whether the assessee is an intermediary with reference to the service to universities, colleges and banks and whether any service tax could be levied and answered the issue in favour of the assessee as under: "10. We find that the appellant is nowhere providing services between two or more persons. In fact, the appellant is providing services to their clients namely banks/colleges/university who are paying commission/fees to the appellant. The appellant is only facilitating the aspirant student and introduced them to the college and if these students gets admission to the college, the appellant gets certain commission which is in nature of promoting the business of the college and for re....
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....I 1242 - CESTAT (Tri.), that receipt of consideration from the overseas client excluded them from tax as intermediary, the appellant cannot be held to be providing intermediary service as it is an admitted position that the appellant had been receiving consideration in the form of commission from the recipients of service placed abroad. 20. The definition of "intermediary services" in Section 2(13) of Integrated Goods and Service Tax Act, 2017 is pari-materia with the definition of "intermediary services" in Rule 2 (f) of Rules, 2012 and the same has been considered by the decision of the High Court of Punjab and Haryana in Genpact India Pvt Ltd versus Union of India, 2023 (68) GSTL 3 (P&H) where the primary issue was whether the petitioner would be covered under the expression "intermediary" as defined under the provisions of the IGST Act and whether the services rendered by the petitioner under the agreement be treated as "intermediary services". The observations of the High Court are clearly applicable in the present case and the relevant paras are quoted below : "28. As per definition of "intermediary" under Section 2(13) of the IGST Act the following three con....
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....x Regime. The circular after making a reference to the definition of "intermediary" both under Rule 2(f) of the Place of Provision of Service Rules, 2012 and under Section 2(13) of the IGST Act clearly states that there is broadly no change in the scope of "intermediary" services in the GST regime vis-a-vis the service tax regime except addition of supply of securities in the definition of "intermediary" in the GST law." 21. Similarly, the Delhi High Court in a recent decision in Ernest and Young Vs. Additional Commissioner, CGST, Delhi, 2023 (73) GSTL 161 considered the issue whether the services claimed are actually exported and convertible foreign exchange received by the party in lieu of the said export services and observed as under: "33. In terms of sub-section (8) of Section 13 of the IGST Act, the place of supply of certain services would be the location of the supplier of the services. In terms of clause (b) of sub-section (8) of Section 13 of the IGST Act, the place of supply of intermediary services is the location of the supplier of services. In the present case, the place of supply of services has been held to be in India on the basis that the petitioner is....