Upholding the Delhi High Court, the Supreme Court ruled that educational consultancy services rendered to foreign universities on a principal-to-principal basis qualify as exports, not intermediary services, entitling Global Opportunities to GST refunds and granting relief to service exporters.
NEW DELHI : The Supreme Court ruled that “educational consultancy services” provided to foreign universities on a principal-to-principal basis qualify as “exports of services” and are eligible for GST refunds.
The apex court stated that these service providers should not be classified as intermediaries simply because Indian students benefit from their services and payments are received in foreign currency. This decision offers significant relief to service exporters.
A Bench led by Justice JB Pardiwala upheld the Delhi High Court’s September ruling that granted GST refunds to Global Opportunities, a company that helps Indian students seeking higher education abroad.
Factual Backgrounds of the Case:
Global Opportunities Private Limited is an India-based company engaged in providing educational consultancy and counselling services to Indian students aspiring to pursue higher education abroad. The company enters into agreements with foreign educational institutions (FEIs) under which it undertakes marketing, counselling, and student facilitation services in India.
Under these arrangements:
- The Global Opportunities Private Limited counsels Indian students regarding overseas education options.
- Students independently apply to foreign universities.
- The final authority to grant admission remains exclusively with the foreign universities.
- Upon successful admission of students, the foreign universities pay a commission to the Global Opportunities, generally in convertible foreign exchange.
For the relevant periods between Financial Years 2018–19 and 2021–22, the Global Opportunities paid GST on such commissions and subsequently filed refund applications claiming that the services qualified as export of services under Section 2(6) of the IGST Act.
However, the GST Department rejected multiple refund claims on the ground that:
- The Global Opportunities was allegedly acting as an “intermediary” under Section 2(13) of the IGST Act.
- In terms of Section 13(8)(b) of the IGST Act, the place of supply for intermediary services was deemed to be India.
- Consequently, the services did not qualify as export of services, disentitling the Global Opportunities from GST refunds.
Aggrieved by repeated rejection orders, the Global Opportunities preferred appeals before the Appellate Authority under GST, which allowed the appeals and directed grant of refunds. These appellate orders were challenged by the Commissioner of Delhi GST before the Delhi High Court through the present writ petition.
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Findings of the Delhi High Court:
The High Court determined that Global Opportunities does not meet the criteria of an ‘intermediary’ as defined in Section 2(13) of the Integrated Goods and Services Tax Act (IGST Act) and that the services it provides to foreign universities qualify as exports.
The Commissioner of Delhi Goods and Service Tax challenged this High Court ruling, arguing that Global Opportunities acted as an agent for foreign universities and therefore fell under the definition of an “intermediary.”
The High Court rejected the Revenue’s petition contesting the Appellate Authority’s decisions to grant refunds of taxes paid on exported educational consultancy services. It observed that the company operates on a principal-to-principal basis, rather than merely arranging or facilitating transactions between two parties, and thus cannot be classified as an intermediary.
The High Court relied on the decision of Supreme Court in Commissioner of Central Excise and Service Tax v. Oceanic Consultants Pvt. Ltd and Confirmed that education consultants receiving commission from foreign universities are not intermediaries.
The High court also relied on Ernst & Young Ltd. v. Additional Commissioner, CGST (Delhi High Court)
and Clarified that rendering services on one’s own account does not amount to intermediary services. Considering K.C. Overseas Education Pvt. Ltd. v. Union of India (Bombay High Court) held that educational consultancy services to be exports of services.
Following student admissions, foreign universities paid commissions to Global Opportunities as per their agreements. The company initially claimed refunds for GST paid on exported services, but the department denied these claims, asserting that the company was an “intermediary” under Section 2(13) of the IGST Act, so the services did not qualify as exports. The appellate authority ruled in August 2024 in favor of Global Opportunities, instructing the revenue to issue the refunds.
The High Court noted that recent suggestions from the GST Council to remove Section 13(8)(b) of the IGST Act demonstrated a legislative intent to clear up uncertainties regarding intermediary services and export benefits.
The High Court ruling emphasized,
“Thus, ‘intermediary services’ are no longer services for which the place of location of the supplier would be deemed as the place of supply. Even for such services, the place of the recipient of the services would be the place of supply as per Section 13(2) of the IGST Act. The confusion that was prevalent relating to intermediaries and their entitlement to claim benefits on the basis of export of services is eliminated,”
Before this Supreme Court ruling, there was divergence among tribunals and high courts on what constitutes “intermediary services” versus direct export services. The apex court has now Confirmed that the substance of contractual relationships controls GST characterisation, not the labels used in agreements and that simply facilitating Indian students does not make a consultancy an intermediary if the contractual obligation and consideration flow from a foreign recipient.
In its ruling, the Supreme Court held that:
- Educational consultancy services rendered by Indian entities to foreign universities on a principal-to-principal basis are an “export of services” under Section 2(6) of the Integrated Goods and Services Tax Act, 2017 (“IGST Act”).
- Such services cannot be treated as “intermediary services” merely because Indian students benefit from them, or because the service provider receives commission upon student admission.
- Therefore, the services qualify as zero-rated exports, entitling the Indian consultant to GST refund and related export benefits
Case Title: Commissioner of Delhi GST v. Global Opportunities Pvt. Ltd
Read Order of the High Court:
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