The classification of services as 'export' rather than 'intermediary' under GST depends on the nature of the contractual arrangement, specifically the number of parties involved.

JUDGMENT :

K.R. SHRIRAM, CJ.

1. Both petitions involved common issues and, therefore, we are disposing both by this common order. 2. The issue involved is whether the services supplied by petitioner during the relevant period i.e. 2019-20 in D.B. Civil Writ Petition No. 9933/2024 and 2020-21 in D.B. Civil Writ Petition No.9967/2024 qualifies as “intermediary” as alleged by the Department or do they qualify as “export” as the place of provision of services being outside taxable territory.

FACTS:

3. Petitioner is a subsidiary of IDP Education Ltd., a publicly listed Australian Company (IDP Australia). IDP Australia has entered into agreements with various Foreign Universities, inter alia, to assist aspiring students with enrolment with these Foreign Universities. A copy of specimen student’s recruitment agreement is at page 79 of Writ Petition No. 9933/2024, which enlists the services which are rendered by IDP Australia to universities. IDP Australia is paid certain percentage of the student’s fee as consideration, for providing such services to Foreign Universities.

3.1. To meet its obligation towards the Foreign Universities, IDP Australia has further entered into a separate service agreement with petitioner, a copy of which is exhibited at page 123 of Writ Petition No. 9933/2024. Under the said agreement, petitioner provides services with regard to student’s placement, providing information and guidance of courses, qualification requirement, counseling, enrollment services etc., to the students aspiring to join Foreign Universities. As per the agreement, IDP Australia remains the ultimate authority for finalizing of the admission process. A certain percentage (77%) of the application processing fee received by IDP Australia is paid to petitioner as consideration for the services rendered by it to IDP Australia.

3.2. The services provided by petitioner to IDP Australia are on principal-to-principal basis and the final authority to decide on a student’s admission is with IDP Australia without petitioner having any say about the same. The entire arrangement is akin to sub-contracting of services by IDP Australia to petitioner which IDP Australia is obliged to provide to Foreign Universities.

3.3. Petitioner classified the services supplied by it to IDP Australia as export of services as defined under Section 2 (6) of the Integrated Goods and Services Tax Act, 2017 (for short ‘ the IGST Act’) and was claiming refund of IGST paid for such zero- rated supply as per Section 16 (3)(b) of the IGST Act.

3.4. The Original as well as the Appellate Authority held a view that petitioner’s services qualify as intermediary, and therefore, the place of its supply would be the location of petitioner, that is in India and hence denied export status and consequently denied refund of IGST claimed by petitioner. In addition to other grounds justifying invocation of writ remedy such as judicial indiscipline, due to absence of GST Tribunal Petitioner has moved this Hon’ble High Court under Article 226 of the Constitution of India.

3.5. Before alluding to the submissions, it is significant that for the pre-GST period, i.e., the period April 2014 – September 2015, Petitioner was confronted with a similar dispute with Respondent where the Ld. CESTAT vide its Order dated 28.10.2021 categorically held that the services rendered by Petitioner did not qualify as intermediary and upheld the export status of the same. Further, the CBIC vide its Circular dated 20th September 2021 has observed (para 2.3) that there is broadly no change in the scope of intermediary services in the GST regime vis-à-vis Service Tax regime. Petitioner did rely upon CESTAT Order dated 20th October 2021 read with Circular dated 20th September 2021 before the lower authorities to justify its claim of export, which was not considered favourable, resulting in the present Writ Pet