2025 (3) TMI 573 - AT - Service Tax

Classification of service - export of service or an intermediary service? - services provided by the appellant to overseas educational universities/colleges - HELD THAT - The appellant is rendering services to foreign universities/colleges and is getting commission when the students get admission. Further the services rendered by the appellant comply with the conditions prescribed under Rule 6A ibid which lays down the criteria for determining whether a service is an export of service or not. An identical issue has been considered by the Chandigarh Bench of the Tribunal in the case of M/s Sunrise Immigration Consultants Private Limited 2018 (5) TMI 1417 - CESTAT CHANDIGARH wherein the Tribunal has held that the service provided by the appellant who is providing services of referral for foreign universities is an export of service not an intermediary service . Conclusion - The services provided directly to a foreign recipient with payment in foreign exchange and meeting the conditions of Rule 6A qualify as export services. The services do not qualify as intermediary services when the service provider acts on its own account. Appeal allowed.

ISSUES PRESENTED and CONSIDERED

The core legal issue in this case was whether the services provided by the appellant to overseas educational universities/colleges constituted an "export of service" or an "intermediary service" under the applicable service tax laws. This determination would affect the appellant's liability for service tax.

ISSUE-WISE DETAILED ANALYSIS

Relevant legal framework and precedents:

The legal framework primarily involved the Service Tax Rules, 1994, specifically Rule 6A, which outlines the conditions under which a service is considered an "export of service." The case also referenced precedents such as the Tribunal's decision in M/s Sunrise Immigration Consultants Private Limited and Advanced Ruling Authority decisions in Universal Services India Pvt. Ltd. and Godaddy India Web Services Pvt. Ltd.

Court's interpretation and reasoning:

The Tribunal analyzed whether the appellant's services met the criteria for "export of service" under Rule 6A. The Tribunal emphasized that the appellant provided services directly to foreign universities/colleges and received payment in foreign exchange, which supported the classification as an export of service. The Tribunal also considered the precedent set in M/s Sunrise Immigration Consultants Private Limited, which established that similar services were not intermediary services.

Key evidence and findings:

The Tribunal found that the appellant was located in India, while the service recipients (foreign universities/colleges) were located outside India. The services provided were not specified in Section 66D of the Act, and the place of provision was outside India. Payments were received in foreign exchange, and the service provider and recipient were not distinct persons under the relevant legal provisions.

Application of law to facts:

The Tribunal applied Rule 6A to the facts, concluding that the appellant's services fulfilled all the conditions for being classified as an export of service. The Tribunal rejected the classification as intermediary services because the appellant provided the main service on its own account, similar to the precedent cases.

Treatment of competing arguments:

The Tribunal considered the Revenue's argument that the services were intermediary but found it unpersuasive in light of the appellant's direct service provision to foreign universities/colleges and the precedent cases. The Tribunal noted that the appellant did not facilitate services between two parties but provided services directly to the universities/colleges.

Conclusions:

The Tribunal concluded that the services provided by the appellant were export services, not intermediary services. Consequently, the appellant was not liable for service tax under the service tax laws.

SIGNIFICANT HOLDINGS

The Tribunal held that the appellant's services constituted an export of service, not an intermediary service, based on the fulfillment of conditions under Rule 6A. The Tribunal followed the precedent set in M/s Sunrise Immigration Consultants Private Limited, which was consistent with the Tribunal's findings.

Preserve verbatim quotes of crucial legal reasoning:

"We find that the appellant is nowhere providing services between two or more persons. In fact, the appellant is providing services to their clients namely banks/colleges/university who are paying commission/fees to the appellant... So the nature of service provided by the appellant is the promotion of business of their client, in terms, he gets commission which is covered under Business Auxiliary Service..."

Core principles established:

The Tribunal reaffirmed the principle that services provided directly to a foreign recipient, with payment in foreign exchange and meeting the conditions of Rule 6A, qualify as export services. The Tribunal also clarified that such services do not qualify as intermediary services when the service provider acts on its own account.

Final determinations on each issue:

The Tribunal set aside the impugned order, allowing the appellant's appeal with consequential relief as per law, confirming that the services in question were export services and not subject to service tax.

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