TaxTMI 
TaxTMI 
2025 (9) TMI 1074
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....ts that they have established tie-ups with various esteemed foreign institutions to promote the courses offered by those institutions and to facilitate the admission of Indian students into such courses. The applicant's collaboration with these foreign universities and colleges is on a principal-to-principal basis, wherein the applicant operates as an independent consultant. The decision-making authority regarding the admission of students rests solely with the respective universities and colleges; the applicant has no role in this process. The applicant markets the courses of the partnered institutions and provides recruitment and referral services, thereby ensuring a smooth and efficient admission process for the students. 4.2 The applicant provides marketing, recruitment, and referral services to partnered foreign universities and colleges in connection with the admission of students from India to those institutions. The applicant seeks clarification on whether these services, provided to the foreign institutions on a principal-to-principal basis, qualify as intermediary services as defined under Section 2(13) of the IGST Act, or as independent services rendered in the ca....
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....curities on his own account. The applicant contends that the services rendered by them constitute an independent supply of marketing, recruitment, and referral services to foreign educational institutions. Accordingly, they submit that these services fulfill all the conditions specified under Section 2(6) of the IGST Act, 2017, to qualify as "export of services", namely: a) The applicant, being the supplier of services, is located in India. b) The recipient of the services, i.e., the foreign educational institutions, are located outside India. c) The place of supply of services, in accordance with Section 13(2) of the IGST Act, is outside India. d) Payment for the services is received by the applicant in convertible foreign exchange. e) The applicant is not merely an establishment of a distinct person in accordance with Explanation 1 to Section 8 of the IGST Act. 4.7 The applicant further submits that it operates as an independent contractor, entering into agreements and contracting directly with foreign universities and colleges on a principal-to-principal basis. It is also submitted that the applicant does not arrange or facilitate ....
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.... (such as marketing) are not classified as intermediaries under GST. 5. Comments of the Jurisdictional Officer: The application was forwarded to the jurisdictional officer as per provisions of Section 98(1) of the CGST Act. The Jurisdictional Officer reported that there are no pending or decided proceedings against the applicant under any provisions of the CGST Act 2017. 6. Personal Hearing: The applicant was granted opportunity for personal hearing on 16.04.2025 through Virtual Mode. Shri. Subin Babu, Chartered Accountant appeared and submitted the facts and circumstances of the case. The applicant filed additional submission, including the agreement dated 13.02.2024 executed with University of Europe, for reference. The applicant requested to issue a ruling on the basis of the submissions made by them along with the application as well as at the time of personal hearing. 7. Discussion and Conclusion: 7.1 The issue is examined in detail. The applicant wants to know whether the services rendered by them is "intermediary services" as defined under Section 2(13) of the IGST Act, 2017, or whether they are considered independent services of "Marketing /Recruitment /Re....
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...."export of services" as defined in terms of section 2(6) of the IGST Act. 7.5 One of the key documentary evidences submitted by the applicant is the Recruiting Service Agreement (MOU) dated 13.02.2024, entered into between Maryland Study Abroad Private Limited and the University of Europe for Applied Sciences GmbH. Upon analyzing this agreement in detail, the following observations emerge. 7.5.1 Upon examining the agreement executed between the applicant and the foreign institution, it is evident that the contractor (i.e., the applicant) is contractually obligated to perform certain promotional activities for the various courses and programs offered by the college. According to the terms of the agreement: (i) the contractor is solely responsible for its operational and marketing expenses (Clause 8.11); (ii) the college shall be liable only for marketing expenses that are pre-approved in writing and incurred exclusively for promoting the college and its programs; and (iii) the college reserves the right to request invoices or other appropriate evidence of payment before reimbursing any pre-approved expenses. Consequently, the contractor is not assure....
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....is integrally involved in facilitating the core supply, which is the provision of education. 7.5.5 While the applicant emphasizes Clause 10 of the agreement, which states that the arrangement does not establish a partnership or agency, it is settled law that the character of a transaction must be determined by its substance rather than its form. The CBIC, in Circular No. 159/15/2021-GST dated 20.09.2021, has clarified that intermediary classification must be based on the actual nature of services rendered specifically, whether the person is arranging or facilitating a supply between two other parties. This aligns with the established legal maxim "Substantia potius quam forma" (substance prevails over form), often invoked in taxation to emphasize the underlying functional relationship over mere contractual terminology. Furthermore, the definition of "intermediary" in Section 2(13) explicitly excludes a person who supplies goods or services on his own account. Applying the legal maxim "Expressio Unius Est Exclusio Alterjus" (the express mention of one thing excludes another), it follows that all those who do not supply services on their own account i.e., those who facilitate the s....
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....y the concept of intermediary services. As per the circular, there are two distinct supplies in case of provision of intermediary services: (1) Main supply, between the two principals, which can be a supply of goods or services or securities; (2) Ancillary supply, which is the service of facilitating or arranging the main supply between the two principals. This ancillary supply is supply of intermediary service and is clearly identifiable and distinguished from the main supply. In the instant case the main supply is made by the foreign Universities to the Indian students. The ancillary supply is the services provided by the taxpayer by facilitating or arranging the main supply. The Circular clarifies that the phrase "such goods or services" refers to the main supply being arranged or facilitated. Therefore, where a person supports or facilitates a transaction between two other persons, without supplying the same service themselves, they fall within the scope of "intermediary". 7.7.2 Illustration 1 of the said Circular discusses a case where a person arranges the sale of machinery from one party to another and is paid for doing so. Although this person does n....
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....t. 7.8.1 In the present case, however, there is nothing on record to indicate that the foreign universities have sought or received any strategic, brand-positioning, market-entry or policy-level advice from the applicant. The applicant has not demonstrated that it undertook any independent market research, curriculum benchmarking, institutional promotion strategy or Similar expert-driven engagement. Instead, the applicant's role is limited to execution level facilitation promoting pre-defined programs, referring students, and providing application assistance. This excludes it from the scope of a true consultancy engagement as understood in commercial and tax parlance. 7.8.2 Further, in contrast to a marketing consultant who typically receives a fixed retainer or service fee for promoting a product or service independent of actual sales, the applicant is paid on a commission basis, contingent entirely on the successful enrollment of a referred student. This model is more akin to a performance-linked facilitator than an independent consultant. A recruitment consultant, on the other hand, usually operates on behalf of an employer and identifies candidates through an independ....
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.... States: • In Global Reach Education Services Pvt. Ltd. [Advance Ruling No. 15/WBAAR/2018-19 dated 08.05.2018, West Bengal], the West Bengal AAR held that student recruitment services provided by an Indian entity to foreign universities constituted intermediary services, as the applicant was facilitating the supply of education from the foreign university to Indian students. The decision was upheld by the West Bengal AAAR [Order No. 06/WBAAAR/Appeal/2019 dated 20.03.2019], which reaffirmed that the applicant was not supplying the education service on its own account and thus was squarely covered by Section 2(13). • Similarly, in DKV Enterprises Pvt. Ltd. [Advance Ruling No. AAR/AP/02(GST)/2020 dated 27.02.2020, Andhra Pradesh], the applicant provided marketing and liaison services to a Singapore based company. The AAR held that the Indian entity was facilitating the supply of goods from the foreign principal to Indian customers and thus fell within the scope of an intermediary, with the place of supply being India as per Section 13(8)(b). This ruling was affirmed by the Appellate AAR in Order-in-Appeal No. AAAR/AP/03(GST)/2020 dated 22.06.2020. â....
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.... not supply any independent service on their own account. Thus, this Authority finds that the applicant's role mirrors that of the entities in the aforementioned rulings and their services are to be treated as intermediary services, with the place of supply located in India, and therefore not eligible for export benefits under the IGST framework. 7.9.4 The applicant has placed reliance on the decision of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in the case of Sunrise Immigration Consultants Put. Ltd. v. CCE, Chandigarh [Final Order No. 62104/2018 dated 03.08.2018], wherein it was held that marketing and referral services provided to foreign educational institutions did not amount to intermediary services under the Finance Act, 1994. However, the Tribunal's finding in that case was based on the prevailing Service Tax regime, which lacked a comprehensive definition of "intermediary" analogous to Section 2(13) of the IGST Act, 2017. Further, the facts of that case involved broader immigration assistance and overseas settlement services not directly integrated into the education supply chain, distinguishing it materially from the applicant's specif....