2018 (4) TMI 808 - AAR - GST

Overseas Education Advisory services - promotion of courses of foreign universities among prospective students - place of supply/provision of service - whether the service provided to the Universities abroad is to be considered export within the meaning of Section 2(6) of the Integrated Goods and Services Act, 2017, and, therefore, a zero-rated supply under the CGST / WBGST Act 2017? Held that - in the case of Export of Services all the conditions as laid down under Section 2(6) of IGST Act 2017 is to be followed in totality without any violation, and that there is no scope of partial compliance of the conditions laid down therein. The Applicant is facilitating recruitment / enrolment of students to foreign Universities. Promotional service is incidental and ancillary to the above principal supply and the Applicant is paid consideration in the form of Commission, based on performance in recruiting students, as a percentage of the tuition fee collected from the students enrolled through the Applicant. The Applicant, therefore, represents the University in the territory of India and acts as its recruitment agent. Place of supply of services - Held that - Whatever services the applicant provisions are provided only as a representative of the University and not as an independent service provider - Being an intermediary service provider, the place of the Applicant s supply shall be determined under section 13(8)(b) of the IGST Act and not under section 13(2) of the IGST Act. - The place of supply is the territory of India. As the condition under section 2(6)(iii) of the IGST Act is not satisfied, the Applicant s service to the foreign universities does not qualify as Export of Services , and is, therefore, taxable under the GST Act. Ruling - The services of the applicant are not Export of Service and are taxable under the GST Act. This ruling is valid subject to the provisions under Section 103(2) until and unless declared void under Section 104(1) of the GST Act.

Summary

Issues:
1. Whether the services provided by the applicant to foreign universities qualify as "export" under the IGST Act.
2. Whether the applicant is providing intermediary services or acting as an independent service provider.
3. Whether the place of supply of the services provided by the applicant is outside India.

Analysis:
1. The applicant sought a ruling on whether their Overseas Education Advisory services to foreign universities constitute "export" under the IGST Act. The applicant argued that the services provided, promoting courses to prospective students, meet the criteria for export as per section 2(6) of the IGST Act, with the recipient located outside India and consideration received in foreign exchange.

2. The Advance Ruling Authority deliberated on whether the applicant was acting as an intermediary service provider or an independent service provider. The authority noted that the applicant's main service was facilitating recruitment of students for foreign universities, with promotional activities being ancillary. The applicant's consideration was tied to student recruitment performance, indicating a principal supply of recruitment services rather than independent promotion.

3. The determination of the place of supply was crucial in deciding the export status of the services. The authority analyzed the applicant's role as a recruitment agent for foreign universities, leading to the conclusion that the services were not "Export of Service" under the IGST Act. As the applicant was considered an intermediary service provider, the place of supply was deemed to be in India, making the services taxable under the GST Act.

Conclusion:
The ruling established that the applicant's services did not qualify as "Export of Service" and were deemed taxable under the GST Act. The decision was valid unless declared void under the relevant provisions of the GST Act.