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TMI Blog2020 (12) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... nd applicability of Section 13(8)(b) of the IGST Act, thereon? - HELD THAT:- The appellant is providing a service of Promotion and Marketing to the university/college on a principal to principal basis and is not facilitating a provision of service between two persons. It also needs to be mentioned that in few cases appellant in addition to the above service has also undertaken the activity of providing market intelligence about the requirements of the intending students. This also shows that the appellant is providing a service directly to the Universities/Colleges and not to any person on behalf of the Universities/Colleges. This fact is itself contradictory here as the appellant himself is accepting that only in few cases they were providing their services directly on principle to principle basis. It shows that they are themselves accepting that they are providing intermediary services. The appellants were engaged by the foreign universities/institutes to represent them in the territory of India who in-turn acted as their education/recruitment agent to perform the services in the territory of India. That such services provided by the appellants were only as a representative of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Export of Services under the GST Act, and refund claims of the appellant are inadmissible and liable to be rejected. Appeal disposed off. X X X X Extracts X X X X X X X X Extracts X X X X ..... 23-4-2020 November, 2017 65,25,256/- ZR0405200063861, dated 9-5-2020 Rejected 3 ZZ0404200283904, dated 23-4-2020 December, 2017 31,78,122/- ZS0405200063894, dated 9-5-2020 Rejected 4 ZR0404200254404, dated 13-4-2020 January, 2018 15,79,670/- ZQ0404200481993, dated 29-4-2020 Rejected 5 ZT0404200254559, dated 13-4-2020 February, 2018 83,63,591/- ZO0404200482171, dated 29-4-2020 Rejected 3.1 The sanctioning authority rejected the refund claims in respect of tax paid on commission received by them for the services made to foreign academy/university under Section 54 of the Act on the grounds that the service of Recruitment Agent (whose work was to facilitate the recruitment of prospering students in foreign academy or university), being provided by the appellant fell under the category of "intermediary service" and that were not "export of services"; that the refund claim was time barred (except the refund claim for the month of February, 2018) and that unjust enrichment was also involved. 4. Being aggrieved, with the impugned orders, the appellant preferred the subject appeals on similar grounds which, inter alia, are summarized as under. 4.1 Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis and was not facilitating a provision of service between two persons. That it also needs to be mentioned that in few cases appellant in addition to the above service had also undertaken the activity of providing market intelligence about the requirements of the intending students. That shows the appellant was providing a service directly to the Universities/Colleges and not to any person on behalf of the Universities/Colleges. That, hence the appellant was not an "intermediary" as defined under as per Section 2(13) of the IGST Act. 4.5 That "intermediary" is a person who arranges or facilitates a provision of service between two persons. That in the present case, the recipient of service i.e. the universities/colleges were providing the service of education to its students but the appellant was in no way concerned with the imparting of education service. That the appellant was only referring the students to the universities/colleges. That they did not impart any education service to any student on behalf of the universities/colleges. That the appellant cannot even guarantee admission to anyone. That granting or denying admission is the sole discretion of the Educational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision of a service has to be determined as per Section 13 of the IGST Act, 2017. Sub-section applicable in the present case is sub-section (2) as the appellants were providing the service to various universities/colleges on principal to principal basis and the location of the service receivers i.e. universities or colleges, was known and were outside India and hence service was export of service as the receipt of payment of foreign convertible currency was not in dispute. 4.10 That further the sanctioning authority has erred in rejecting the refund claims on the ground of Unjust enrichment by totally over-looking the provision of sub-sections (5) and (8) of Section 54. 4.11 The appellant has contested that the refund claims were not time barred. That the appellants filed the refund claims for the above said periods in time against which various deficiency memos were issued. Refund claims were refiled and again deficiency memos were issued and this process was repeated many times. That the refunds filed through the GST portal were originally filed on time and in such a situation the refunds cannot be treated to have been filed late i.e. on 28-2-2020 as assumed by the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13-2-2020 - Refiled on 29-11-2019 13-12-2019 29-1-2020 - - Deficiency Memo 11-12-2019 26-12-2019 13-2-2020 - - Refiled on 13-12-2019 27-12-2019 - - - Deficiency Memo 26-12-2019 10-1-2020 - - - Refiled on 27-12-2019 29-1-2020 - - - Deficiency Memo 10-1-2020 13-2-2020 - - - Refiled on 29-1-2020 - - - - Deficiency Memo 13-2-2020 - - - - Finally filed on 27-2-2020 28-2-2020 28-2-2020 28-2-2020 28-2-2020 6.2 In this regard the appellant has contended that they had filed the refund claims tor the above said periods in time against which various deficiency memos were issued; that refund claims were refiled, again deficiency memos were issued and this process was repeated many times; that the refunds filed through the GST portal were originally filed on time and in such a situation the refunds cannot be treated to have been filed late i.e. on 28-2-2020; pertinently, that the common portal has been so designed that it does not permit the downloading of refund utility file if a Deficiency Memo for the earlier period has been issued; that as a result, the assessee was not able to file the refund claim for the subsequent period when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6.6 They have further contested that the appellants were only referring the students to the universities/colleges and that the appellants had any role to play in the provision or facilitating the Education Service to the students on behalf of the Education Institute. That therefore, they do not fall under the definition of "intermediary", hence Section 13(8)(b) of the IGST Act did not apply in their case. 6.7 I find that on behalf of the foreign universities/institutes, the appellant promoted their courses in India; found suitable Prospective Indian Students to undertake Courses at such universities in accordance with University procedures & requirements and assisted enrolment of such suitable students in the foreign institutes/universities. Hence, the main service provided by the appellants was that of facilitating recruitment/enrolment of students to foreign Universities; the consideration was paid in the form of commission on the basis of course fee as well as the number of students enrolled by the appellants and that promotion of the courses was incidental and ancillary to the above principal supply. I further find that if the students got enrolled directly by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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. 6.10 The above said definition of intermediary provides specific exclusion of a person who supplies such goods or services or both or securities on his own account and that intermediary services involves minimum three parties & the service provider providing such service involved with two supplies at any one time. 6.11 From the above, I observe that an intermediary is a go-between two persons, i.e. main service provider and the service recipient. An intermediary provides service to both the persons, though he may have contractual agreement with only one or both of them hence, it may not be feasible to prescribe one person as the recipient of intermediary service. Further, intermediary acts as an agent of the principal and in that sense, he may be providing a service to the principal and the place of effective use and enjoyment of such service is in the territory where the agent is representing the principal. In other words, an intermediary is a go between the two persons, helps in providing or acquiri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner has tried to submit that the services provided by a broker outside India by way of intermediary service should be considered as "export of services" but the legislature has thought it fit to consider such intermediary services; the place of supply would be the location of the supplier of the services. In that view of the matter, it would be necessary to refer to the definition of "export of services" as contained in Section 2(6) of the IGST Act, 2017 which provides that export of service means the place of service of supply outside India. Conjoint reading of Sections 2(6) and 2(13), which defines export of service and intermediary service respectively, then the person who is intermediary cannot be considered as exporter of services because he is only a broker who arranges and facilitate the supply of goods or services or both. In such circumstances, the respondent no. 3 have issued Circular No. 20/2019 where exemption is granted in IGST rates from payment of IGSI in respect of services provided by intermediary in case the goods are supplied in India. 66. It therefore, appears that the basic logic or inception of section 13(8)(b) of the IGST Act, 2017 considering the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity without any violation, and that there is no scope of partial compliance of the conditions laid down therein. 6.15 Furthermore, the issue as to whether such services are intermediary services or can be considered as export or not, has also been decided again in favour of the Revenue vide Order No. 2/WBAAR/2017-18, dated 22-1-2018 in the case of M/s. Global Reach Education Services Pvt. Ltd. by West Bengal Authority for Advance Ruling which was upheld by the Appellate Authority for Advance Ruling (AAAR), West Bengal vide order dated 24-7-2018 [2018 (15) G.S.T.L. 618 (App. A.A.R. - GST)]. holding that the appellant acts as facilitators/agency (intermediary) between potential students and foreign universities; that in lieu of commission received from the foreign university for the service of promotion of the university courses among the prospective students & service provider on behalf of university (as agent) under the terms & conditions of the foreign university binding on the appellant; that the appellant cannot have the liberty to pick &. choose of the terms & conditions laid down in the agreement; that they have to follow these terms & conditions in entirety and that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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