TaxTMI 
TaxTMI 
TaxTMI 
Intermediary Services Under Section 2(13) of the IGST Act and Export of Services Under Section 2(6): Treatment of Education Consultancy Commissions
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....stitutions. The central controversy was whether the taxpayer's commission-based services amounted to "export of services" or were "intermediary services", which would alter the place of supply and, consequently, the refund entitlement. The High Court declined to interfere, upheld the appellate approach that treated the supplies as export of services, and directed processing of refund with applicable statutory interest within a stipulated timeline. Material Facts The taxpayer carried on education consultancy activities for Indian students intending to pursue higher education abroad. The taxpayer entered into agreements with foreign educational institutions under which it provided counselling/consulting and related support, leading to s....
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....-GST and on an order-in-original (details not reproduced here due to anonymisation requirements) alleging non-discharge of tax liability and imposition of penalties. The taxpayer contended that the controversy was covered by prior judicial reasoning on the meaning of "intermediary" and the determination of the service "recipient" and "place of supply", and that its services were supplied on its own account to foreign entities, with consideration received in foreign exchange. The petition sought interference with the refund grant. The High Court considered whether refund entitlement had been correctly determined on the intermediary/export axis. Issue Involved (i) Whether education consultancy/marketing services provided by the taxpayer to....
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....rson who arranges or facilitates the supply of goods or services between two or more persons, but excludes a person who supplies such goods or services on his own account. The Court treated the exclusionary limb as decisive in cases where the taxpayer itself supplies services to the foreign entity, rather than arranging a supply from a third party. 2. Recipient identification is contract-and-consideration driven. The reasoning proceeds on an established principle that the "recipient" of a service is determined by the contractual relationship and by identifying who has the right to receive the service and who bears the obligation to pay consideration. The Court accepted that Indian students might be "users" or beneficiaries of the activity,....
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....icates that substance prevails over nomenclature: the operative test remains whether the taxpayer is merely arranging/facilitating a supply between two persons, or whether it supplies services on its own account to the foreign entity. 6. Treatment of the CBIC circular. Circular No. 159/15/2021-GST was relied upon by the revenue authority to assert taxability in intermediary situations. The Court, however, decided the controversy by applying the statutory definition in Section 2(13) and the place-of-supply framework in Section 13, read with the export definition in Section 2(6), and by following judicial reasoning on the intermediary/export distinction. Any further granular interpretive content of the circular, beyond its general invocation....
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....erely arranging a supply between the foreign institution and Indian students. For practitioners, the drafting and implementation of agreements must align with the Section 2(13) exclusion (supply on own account) rather than presenting an arrangement that is purely facilitative/agent-like in substance. 2. Documentary alignment with export of services conditions under Section 2(6). Even where Section 2(6) is invoked, refund eligibility typically depends on demonstrating each statutory ingredient, including recipient located outside India and payment in convertible foreign exchange (or in Indian rupees wherever permitted by the Reserve Bank of India, as reflected in Section 2(6)(iv)). The present decision turned substantially on recipient/inte....