TaxTMI 
TaxTMI 
2026 (2) TMI 1317
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.... the students under promotional offer, how GST will be attracted in this transaction? At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 1. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions, as reproduced verbatim, could be seen thus 1.1 The applicant is a private limited firm engaged in the business of doing contract from all foreign universities abroad situated in different countries, where they provide them students from their consulting firm for education and overseas courses in their campus, in return the universities will give the applicant commission on each successful admission process. 1.2 Also consulting firm will charge from students residing in India some amount for guiding them and helping them in making application, Loan, visa, e ticketing pr....
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....the services specified in sub-sections (3) to (13) shall be the location of the recipient of services: Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services. 2.3 In view of the above, the applicant is of the opinion that the consultation services provided to the foreign university and received the commission in foreign currency comes under the export of services. The CBIC clarifies conditions for considering the supply of services as an export of services under the Integrated Goods & Services Tax Act, 2017 (IGST Act) vide circular No. 202/14/2023-GST, dated 27th October, 2023. The focus of this circular is on the payment aspect, specifically pertaining to the use of INR (India Rupees) in export remittances. Relevant legal provisions: Export of services has been defined under clause (6) of section 2 of IGST Act. As per the said definition, any supply of services needs to fulfill five conditions for it to qualify as export of services. Clause (6) of section 2 of the IGST Act is reproduced below for reference: "(6) "export of services"....
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....e foreign universities. 3.3 The applicant received the commission after the courses start date and the student has fully paid the tuition fees of all applicable semester in the first academic year / of study. 3.4 It appears that the applicant is an agent, who facilitates the supply of goods, services, or securities between two or more other parties in behalf of the different foreign universities. This definition, found in Section 2(13) of the IGST Act, 2017. 3.5 As per Section 2(13) of Integrated Goods and Services Tax ("IGST") Act, Intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account. In essence, intermediaries act as a conduit for transactions between a supplier and a recipient but do not themselves take possession or ownership of the goods or services involved. 3.6 Intermediary services Vis-A-Vis Export of Services The term "export of services" is defined under Section 2(6) of the IGST Act, 2017, which outlines the....
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....s in the form of guiding them and helping them in making application, Loan, visa, e ticketing process etc. For such services, they charge certain fees from such students. They are also seeking a ruling whether GST is payable on such services provided to the students. 5.2 In order to examine whether the services provided by the applicant to the universities can be considered as export of services, it is necessary to examine the provision governing export of services. Section 2(6) of the IGST Act, 2017, reads as under: - (6) "export of services" means the supply of any service when, - (i) the supplier of service is located in India; (ii) the recipient of service is located outside India; (ii) the place of supply of service is outside India; (iv) the payment for such service has been received by the supplier of service in convertible foreign exchange [or in Indian rupees wherever permitted by the Reserve Bank of India]; and (v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8; 5.3. From the submissions made by the applicant, t....
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....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 Gazette, specify." We find that as per Section 13(8)(b) of the IGST Act, the place of supply for intermediary services is the location of the supplier of the service. In order to determine the place of supply in the instant case, we have to find out whether the services provided by the applicant would fall under the category of intermediary services. We find that the term "intermediary" is defined under Section 2(13) of the IGST Act as: "a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his oum account." The key characteristics that determine whether a service is an....
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....r more persons. It is thus a natural corollary that the arrangement requires a minimum of three parties, two of them transacting in the supply of goods or services or securities (the main supply) and one arranging or facilitating (the ancillary supply) the said main supply. An activity between only two parties can, therefore, NOT be considered as an intermediary service. An intermediary essentially "arranges or facilitates" another supply (the "main supply") between two or more other persons and, does not himself provide the main supply. 3.2 Two distinct supplies: As discussed above, 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 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. A person involved in supply of main supply on principal-to-principal basis to another person cannot be considered as supplier of intermediary service. ....
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....hat the issue is no longer res-integra. In the decision in Ernst & Young Ltd v. Add. Commr. CGST Appeals-II, Delhi, 2023 (73) G.S.T.L. 161 (Del.), a Co-ordinate Bench of Delhi High Court, while dealing with intermediary services, observed as under: 15. The principal question to be addressed is whether the Service rendered by the petitioner to EY Entities in terms of the service agreement constitutes services as an 'intermediary'. 19. The term 'intermediary' is defined under Section 2(13) of the IGST Act. "intermediary" means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account; 20. A plain reading of the aforesaid definition makes it amply clear that an intermediary merely "arranges or facilitates" supply of goods or services or both between two or more persons. Thus, it is obvious that a person who supplies the goods or services is not an intermediary. The services provided by the intermediary only relate to arranging or facil....
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....' to mean as indicated in section 2(6)(ii), as defined in Section 2(93) of the GST Act in conjunction with Sec. 13(2). All these provisions, in light of the definition of 'intermediary' as defined in Section 2(13) of the IGST Act has been considered by the learned Division Bench of the Delhi High Court in Ernst & Young Ltd Vs. Add. Com. CGST 12023 (73) GSTL 161 (Del.), which also considers, the circular dtd 20.9.2021 bearing No. 159/15/21-GST issued by the Central Board of Indirect Tax and Customs. 3. We have perused the reasons and conclusion in Ernst & Young Ltd Vs. Add. Com. CGST and upon hearing the contention of Mr. Bhattad, learned Counsel for respondent Nos. 3 and 4, do not see any ground made out for us to take a different view. 4. It is also necessary to note, that the function, which the petitioner is performing under the agreement with the foreign university is also considered by the Service Tax Appellate Tribunal in Service Tax Appeal No 85867/16 in the order dtd 11.10.2023, in the case of the petitioner itself, which has held that the appellant is providing service to universities located in foreign countries who are paying consideration to the appell....
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....lso stand disposed of." Thus, the Supreme Court reiterated its decisions in Vodafone India Limited and Blackberry India Pvt Ltd. 5.10. A similar situation had arisen in the case of Commissioner of Central Excise and Service Tax, Chandigarh-I v. Oceanic Consultant Pvt. Ltd., (2025) 30 Centax 434 (SC) wherein the Supreme Court dismissed the SLP against a decision by CESTAT wherein it was held that when services are rendered to students in India, foreign universities which pay the commission to such a person as the Respondent cannot be considered as an 'intermediary'. Similar is the view taken by CESTAT, Mumbai Bench in M/s Krishna Consultancy v. Commissioner of CGST, Nagpur Service Tax Appeal No. 85867/2016 decided on 11th October, 2023 wherein the CESTAT has observed as under: "Appellant is engaged in giving guidance to prospective students to seek admissions in universities located outside India. The appellant does not collect any consideration from prospective students. Appellant has entered into contracts with the universities abroad and arrangements are that when a student guided by the appellant secures admission in university in the foreign country and pays fee,....
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....ibunal in the case of Sunrise Immigrations Consultants Pot. Ltd. decided by Chandigarh Bench of this Tribunal. We note that this Tribunal has held that such organisations cannot be treated as intermediaries under the definition of Rule 2(f) of Place of Provision of Service Rules, 2012. We, therefore, hold that the contention of Revenue that the appellant is an intermediary is not in accordance with law. We further note that the appellant has foregone the refund of Rs. 26,43,969/-. Therefore, now the refund claim works out to the tune of Rs. 24,30,172/-. We note that the appellant has not provided all the foreign inward remittance certificates covering the transactions involving service tax of Rs. 24,30,172/-. We, therefore, remand the matter to the original authority with a direction not to rake up any other issue but to collect foreign inward remittance certificates from the appellant in respect of those transactions which involve refund of Rs. 24,30,172/- out of the refund claim of Rs. 50,73,141/- and allow the refund out of Rs. 24,30,172/- in respect of such transactions where FIRCS get produced by the appellant before the original authority. We direct the appellant to produce a....
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....ing the Indian intermediary eligible for an ITC refund. Thus, without prejudice to what has been stated in the paragraphs, hereinabove, once the said amendment is affected, the place of supply in the case of Intermediary services would be the place of recipient of the service and accordingly in the case of export of services where the recipient is located outside India, the place of supply would be considered to be located outside India. 5.13. We now come to the second question raised by the applicant. The applicant has stated that they are providing some services to the students in India such as guiding them and helping them in making application, getting education Loan, visa, e-ticketing process etc. For the said services rendered to the students, they charge certain fees from the students. We find that the applicant is providing consultancy services to the students for which they are receiving consideration in the form of fees. The said services would amount to supply under Section 7(1) of the CGST Act, 2017. Section 7(1) of the CGST Act reads as under: - Supply' includes: 1. all forms of supply of goods or services or both such as sale, transfer, barter, exchange....