2018 (8) TMI 392 – APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL – 2018 (15) G. S. T. L. 618 (App. A. A. R. – GST) – Export of services or not? – promotion services – case of Applicant is that they not intermediary and therefore, is not liable to pay service tax in terms of Rule 6A of the Rules, 1994 read with Rule 9 of the said Rules – challenge to Advance Ruling.
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Held that:- Appellant’s submission is that the Advance Ruling Authority wrongly considered them as recruitment agent facilitating the recruitment or enrolment of students to Foreign Universities, which is not tenable – The Appellant cannot have the liberty to pick and choose only some portions of the Agreement by saying that such and such clause is not being undertaken by it. The Agreement has to be considered in its entirety.
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The Appellant in the instant case was free to refer students to Australian Catholic University (ACU) or any other University of its choice. Further, the fee paid to the Appellant was
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For The Appellant : Mr. Pulak Kumar Saha, Chartered Accountant RULING This Appeal has been by filed M/s Global Reach Education Services Private Limited, holding GSTIN 19AAGCG0859E1ZK (hereinafter referred to as the Appellant ), on 16.04.2018 against the Ruling dated 21.03.2018 pronounced by the West Bengal Authority for Advance Ruling. The Appellant is a Private Limited Company primarily engaged in promoting the courses of Foreign Universities in India among prospective students. The Appellant had approached the West Bengal Authority for Advance Ruling for deciding the determination of liability to pay goods and services tax on Appellant s output services. The West Bengal Authority for Advance Ruling after hearing the matter and examining the documents vide its Ruling dated 21.03.2018 came to the finding that the Applicant was an intermediary service provider and held that: The services of the applicant are not Export of Services and are taxable under the GST Act. The Appellant in Par
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s offered by these Universities. The Appellant argued that the function of an intermediary is to facilitate or arrange the supply of goods or services between two or more persons. The Appellant on the contrary was providing services on its own account, in the nature of marketing and promotion of courses of Foreign Universities in India and remuneration paid for these services was based on a percentage of fees paid by students admitted to the University. The Appellant submitted the copy of its agreement with Australian Catholic University (ACU) dated 23.11.2018 expiring on 22.11.209. In Clause 3.1 of the said agreement main responsibilities of the Appellant, referred to as Education Agent have been spelt out as follows- Under this Agreement the Education Agent must (to the University s satisfaction and as notified by the University from time to time): (a) promote the Courses of the University; (b) find suitable Prospective Students to undertake Courses; (c) in accordance with University
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addy India Web Services Ltd [2016-TIOL-08-ARA-ST], in connection with various support services provided by the applicant to GoDaddy US located in USA. The services included marketing and promotion services of GoDaddy US services in India by way of direct marketing, branding activities and offline marketing. GoDaddy India also provided services for supervising quality of third party customer care centre service. In this case the Authority For Advance Rulings observed that the definition of intermediary as envisaged under Rule 2(f) of the Place of Provision of Services Rules, 2012, does not include a person who provides the main service on his own account and that the applicant was providing business support services to GoDaddy US. The Appellant submitted that the facts in the case are similar to that of GoDaddy and the scope of services provided by the Appellant, inter-alia, includes marketing and promotion services. The Appellant also referred to order dated 16.03.2018 passed by the Cu
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lients namely banks and universities. Therefore, the Applicant did not arrange or facilitate main service i.e. education or loan rendered by colleges/banks. Therefore, the Applicant is not intermediary and therefore, is not liable to pay service tax in terms of Rule 6A of the Rules, 1994 read with Rule 9 of the said Rules. Hon ble Customs, Excise & Service Tax Appellate Tribunal, Chandigarh confirmed the liability to pay tax on the visa facilitation service as the same was not disputed. For other two services the Tribunal observed that ….the appellant is nowhere providing services between two or more persons. In fact, the appeWant is providing services to their clients namely banks/colleges/university who are paying commission/fees to the appellant. The appellant is only facilitating the aspirant student and introduced them to the college and if these students gets admission to the college, the appellant gets certain commission which is in nature of promoting the business of the
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(a) promote the Courses of the University; (b) find suitable Prospective Students to undertake Courses; (c) in accordance with University procedures and requirements, recruit and assist in the recruitment of suitable students; The Appellant cannot have the liberty to pick and choose only some portions of the Agreement by saying that such and such clause is not being undertaken by it. The Agreement has to be considered in its entirety. In the matter of M/s GoDaddy India Web Services Ltd [2016-TIOL-08-ARA-ST], cited by the Appellant, the nature of agreement with GoDaddy US was not identical either in terms of service rendered or the other conditions, including payment for the services rendered. In fact Authority For Advance Rulings (Central Excise, Customs and Service Tax), New Delhi, noted that… In consideration for the above-mentioned support services, the applicant shall charge a fee equal to the operating costs incurred by the applicant plus a mark up of 13 on such costs, which wil
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s length basis. Unlike the agreement of the Appellant, M/s GoDaddy India Web Services Ltd. had M/s GoDaddy US as the only customer and had several other restrictive and stringent conditions including the fee which was fixed equal to the operating cost and a markup of 13 above such cost. The Appellant in the instant case was free to refer students to Australian Catholic University (ACU) or any other University of its choice. Further, the fee paid to the Appellant was not tied to the promotional activities or expenses incurred to promote Courses of ACU but as a percentage of fee paid by the students who got admitted to ACU. In other words no consideration was paid in spite of incurring expenses by the Appellant for promoting activities of ACU, if no student joined ACU. The facts and circumstances of the case of M/s Sunrise Immigration Consultants Private Ltd. v. CCE & ST, Chandigarh, and statutory provisions involved, under which the order was passed by Hon ble Customs, Excise &
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or services or both or securities on his own account; From the above two definitions it is amply clear that the issue of main service decided by the Hon ble Customs, Excise & Service Tax Appellate Tribunal, Chandigarh, in the matter of M/s Sunrise Immigration Consultants Private Ltd. v. CCE & ST, Chandigarh, cannot be imported into intermediary , as defined under the IGST Act, 2017, as the definition of intermediary under Section 2(13) of IGST Act, is not the same as that under Rule 2(f) of the POPS Rules,2012, in as much as under GST an Intermediary is an entity who arranges/facilitates for the supply of services of another entity, which may include ancilliary services, whereas under POPS Rules, 2012, the intermediary arranges/facilitates for provisions of services of the main service provider. In this case, the Appellant promotes the courses of the University, finds suitable prospective students to undertake the courses, and, in accordance with University procedures and requi
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