TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 371
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....ther the Respondent's services qualify as export of services in terms of the agreements which the Respondent enters into with Foreign Educational Institutions (hereinafter, 'FEI')? * Whether the Respondent can be construed as an 'intermediary' in terms of Section 2(13) of the Integrated Goods and Services Tax Act, 2017 (hereinafter, 'IGST Act')? Brief Background: 4. The Respondent is engaged in the business of providing educational consultation to Indian students who intend to travel abroad inter alia, to pursue their higher education in foreign universities. The Respondent is based in Delhi and has entered into agreements with foreign universities for providing such counselling and consulting services. As per the said agreements entered into between the Respondent and the Universities concerned, students who avail such services of the Respondent apply and seek admission in the relevant Universities. If the University accepts the said students for admission for any particular course, the Respondent is paid a commission in terms of the agreement executed between them. 5. The dispute that arises in the present petition is therefore two-fold; * Whether the R....
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....sis of these submissions, it is argued that the orders dated 10th August, 2024 and 4th October, 2024 passed by the Appellate Authority granting refund to the Respondent are not sustainable. According to Mr. Vashisht, ld. SSC, the Appellate Authority has not conducted any discussion on the role of the Respondent and has merely come to the conclusion that it is not an 'intermediary' without any basis. 10. On the other hand, Mr. Gulati, ld. Sr. Counsel appearing for the Respondent submits that the issue which is to be decided in this case is no longer res integra. Ld. Sr. Counsel relies upon the following judgments: i. Verizon Communication India Pvt. Ltd. v. Asstt. Commr., S.T., Delhi-III, 2018 (8) 32 (Del.) ii. Ernst & Young Ltd v. Add. Commr. CGST Appeals-II, Delhi, 2023 (73) G.S.T.L. 161 (Del.), iii. K.C. Overseas Education Pvt. Ltd. v. Union of India, 2025:BHC-NAG:2166-DB iv. The Union of India & Ors. v. K.C. Overseas Education Pvt. Ltd., Petition(s) for Special Leave to Appeal (C) Nos. 21104-21105/2025 v. M/s Krishna Consultancy v. Commissioner of CGST, Nagpur Service Tax Appeal No. 85867/2016 decided on 11th October, 2023 by CESTA....
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....ce keeping in view of the Section 54(1) of CGST Act, 2017, the application could not accepted. 3. The taxpayer filed the refund application under the category of other specify) instead of head of export of services with payment of tax. Keeping in view of the above, I hereby reject the entire refund claim of Rs. 74,29,976" Thus, the Adjudicating Authority held that the Respondent is an intermediary and the services rendered by it do not constitute Export of Services. 13. These Refund Rejection Orders were challenged by the Respondent before the Appellate Authority which reversed and held that the Refunds were liable to be granted. The findings of the Appellate Authority are as under: Order dated 2nd August, 2024 (Forms GST APL-04 dated 4th October, 2024 and 10th August, 2024) "10. I have gone through the entire records/documents placed on record and considered the facts and circumstances of the case as well as the relevant law positions. After having perused the impugned orders and other documents such as agreements and provisions thereof, I am of the considered view that the services provided by the Appellant do not qualify as an intermedia....
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....here are errors being committed by the Proper Officer in rejecting the refund claims of the Appellant. 9. I am therefore of the considered view that the impugned rejection orders passed by the proper officer appears to be not justified and not tenable in accordance with the provisions of the CGST/DGST and rules made therein under. Accordingly, the appeals preferred by the Appellant are allowed and hence all the impugned rejection orders of refund for the period of 2018-19 dated 16.06.2021 are hereby set aside. This is in accordance with the prescribed procedure under the GST Act and Rules." These orders of the Appellate Authority dated 2nd August, 2024 i.e., Forms GST APL-04 dated 4th October, 2024 and 10th August, 2024 are under challenge in the present writ petition. 14. The period for which the refunds are sought in the present case are between Financial Years 2018-19 to 2021-2022. The manner in which the services are provided by the Respondent is that students who intend to pursue education abroad contact the Respondent for its consulting services. The Respondent after providing the said services would recommend students for admissions into certain foreign univer....
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....ing of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month. Explanation.---For the purposes of this sub-section, the expression,--- (a) "account" means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account; (b) "banking company" shall have the same meaning as assigned to it under clause (a) of section 45A of the Reserve Bank of India Act, 1934 (2 of 1934); (c) "financial institution" shall have the same meaning as assigned to it in clause (c) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934); (d) "non-banking financial company" means,--- (i) a financial institution which is a company; (ii) a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or (iii) such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official....
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.... intermediary. This reasoning is fundamentally flawed. The Adjudicating Authority has misunderstood the expression 'intermediary' as defined under Section 2(13) of the IGST Act. A person who provides services, as opposed to arranging or facilitating of goods from another supplier, is not an intermediary within the definition of Section 2(13) of the IGST Act." 18. In the above decision it has been categorically held that a person who supplies the goods and services is not an 'intermediary'. It is only a person who arranges or facilitates the said services who would be considered as an 'intermediary'. Thus, since the recipient of the services provided by the Petitioner therein, was located outside India, the services provided by the Petitioner therein were held to be export of service under Section 2(6) of the IGST Act. 19. This judgment of the Co-ordinate Bench of this Court was considered by the Bombay High Court in K.C. Overseas Education Pvt. Ltd. (Supra). In a short and pithily worded judgment, the Division Bench of the Bombay High Court has followed the principles laid down in Ernst & Young Ltd (Supra) and has observed as under: "2. Only contention raised by Mr. ....
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....herein. We are unable to hold, that considering the definition of 'recipient' as contained in sec 2(93) of the GST Act, which holds an entity to be a recipient in case their consideration is payable supply of services, is the person who is liable to pay that consideration and the language of Sec 13(2) r/w sec 2(6) of IGST in light of the definition of intermediary as contained in sec 2(13) as indicated above, that the petitioner would not fall within that definition and therefore, would be entitled to a refund of the GST paid by the petitioner to the department subject to receipt of the consideration in foreign currency. We therefore, quash and set aside the impugned decision dated 7.3.2024 and allow the petitions in the above terms. Considering the circumstances, there shall be no costs." 20. This decision of the Bombay High Court which relates to identical education consultancy services was challenged before the Supreme Court in Union of India v. K.C. Overseas Education Pvt. Ltd. (Supra) wherein the Supreme Court, dismissed the said SLP in the following terms: "Having regard to the judgment dated 06.05.2025 passed by this Court in Civil Appeal Nos. 10815-10819/2014 (C....
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....t had not uploaded the revised ST-3 return for the period from October 2012 to March 2013 and that for the period from October 2012 to March 2013, the appellant had disclosed their transaction as domestic service. It was further contended in the said show cause notice that the appellant was providing service to Indian students who were beneficiaries of the activities of the appellant. It was further contended that the appellant was functioning like intermediary defined under Rule 2(f) of Place of Provision of Services Rules, 2012. The said show cause notice also stated that the appellant has not provided proof of having received entire consideration in convertible foreign exchange. The refund application was adjudicated through order-in-original dated 12.05.2015. Appellant's contentions were not accepted by the original authority and the refund was rejected. Appellant preferred appeal against the said order before learned Commissioner (Appeals) who did not interfere in the original order and, therefore, the appellant is before this Tribunal. xxxx 5. We have carefully gone through the record of the case and submissions made. We note that the appellant is provid....
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....ty or the FEI cannot be held to be an intermediary service as the Respondent is working as an educational consultant and may be rendering services which may further the cause of the FEI but is not an agent of the said FEI. 23. The decision of the Bombay High Court in K.C. Overseas Education Pvt. Ltd. (Supra), the view taken in Commissioner of Central Excise and Service Tax, Chandigarh-I (Supra) and in M/s Krishna Consultancy (Supra) would be correct. Accordingly, this Court holds that the Respondent's services when rendered to foreign universities and the earnings being in foreign exchange would not constitute intermediary services. 24. The order of the Supreme Court in K.C. Overseas Education Pvt. Ltd. (Supra) refers to decision in Blackberry India Pvt. Limited (Supra) and also in M/s Vodafone India Pvt. Limited (Supra) which in effect upholds the decision of this Court in Verizon Communication India Pvt. Ltd. v. Asstt. Commr., S.T., Delhi-III, 2018 (8) G.S.T.L 32 (Del). In Verizon Communication India Pvt. Ltd. (Supra), this Court had observed as under: "46. The position does not change merely because the subscribers to the telephone services of Verizon US or its US....
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.... requested for the service is liable to make payment for the same and whose need is satisfied by the provision of service who has to be treated as recipient of the service, not the person or persons affected by the performance of the service. Thus, when the person on whose instructions the services in question had been provided by the agents/sub-agents in India, who is liable to make payment for these services and who used the service for his business, is located abroad, the destination of the services in question has to be treated abroad. The destination has to be decided on the basis of the place of consumption, not the place of performance of Service." 52. In Vodafone Essar Cellular Ltd. v. CCE (supra), the CESTAT explained the arrangement lucidly in the following words: "Your customer's customer is not your customer. When a service is rendered to a third party at the behest of your customer, the service recipient is your customer and not the third party. For example, when a florist delivers a bouquet on your request to your friend for which you make the payment, as far as the florist is concerned you are the customer and not your friend." 53. The Depa....