Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 25-9-2018 Last Replied Date:- 16-11-2018 – It is a growing trend now a days that more and more Indian students are opting for higher and technical education from foreign universities abroad and there are agencies who act as facilitators (intermediaries) between potential students and foreign universities. These promote courses of foreign universities in India, arrange or convince to students to join such courses and provide certain ancillary services to both, students as well as foreign universities. These services are in the nature of advisory and/or support services for which it receives consideration in convertible foreign exchange. According to general practice, there is service of promotion of the university courses among the prospective students and the service provider (agent of University) receives consideration for it as an independent service provider. Advance Ruling Since there was confusion prevalent on the
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gn University for these services rendered to prospective students. The Applicant, therefore, submits that the principal supply, therefore, is the service of promoting the courses of the Universities abroad and the services incidental thereto are naturally bundled to the composite supply of business auxiliary services. The applicant is not acting as an intermediary or agent in terms of section 2(13) of the IGST Act, as it supplies the main service (i.e. promotion of the University courses) on its own account. It does not facilitate provision of service by such Universities to the students. Its role is limited to only promoting the courses in India and thus, earns consideration out of it. According to assessee, the agreements between the Universities abroad and the Applicant clarify that the relationship between them is not one of Principal and Agent. This being the case, the place of supply should be the location of the recipient outside India in terms of Section 13(2) of the IGST Act.
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er and employee nor one of principal and agent. The agreement reveal that the main service provided by the applicant is facilitating recruitment of students and the consideration is paid as commission on the basis of course fee and recruitment through the applicant. Promotion of the courses is incidental to the above principal supply. While providing the above service the applicant is subject to audit by the University which includes fulfilling recruitment targets. If the students get enrolled directly by the University through distant education or online services, the Applicant will not be paid any consideration whether or not it has provided any promotional service. Apart from the above consideration received from the University, the Applicant is not allowed to receive any fees or charges from the students or deduct anything from the charges or fees payable by the students to the University. The AAR observed that the assessee is facilitating recruitment / enrolment of students to for
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GST Act. Place of supply of services shall be the location of service provider in India and it will not qualify as export of service. [In Re: Global Reach Education Services Pvt. Ltd. (2018) (2018) 4 TMI 808; ]. Appellate Advance Ruling The assessee was not convinced with the ruling and approached Appellate Authority (AAAR) against the ruling of AAR, West Bengal decided by AAAR on 24.07.2018. AAAR observed that the main responsibilities of education agent inter alia, included: promote the Courses of the University; find suitable Prospective Students to undertake Courses; in accordance with University procedures and requirements, recruit and assist in the recruitment of suitable students. The definition of 'intermediary' under Clause (13) of Section 2 of the Integrated Goods and Services Tax Act, 2017, reads as under: Intermediary means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securit
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ties, finds suitable prospective students to undertake the courses in accordance with University procedures and requirements, recruits and assists in recruitment of suitable students. Assessee to be considered as an intermediary in terms of section 2(13) of IGST Act, 2017, more so when he is not paid any consideration for services provided, if no student is admitted in the University. Services provided by University can not be treated as export of services as per section 2(6) of IGST Act, 2017 and are thus subject to levy of GST. Definition of intermediary under Service Tax and IGST Act are difficult and can not be considered as pari materia to earlier definition in place of provision of services Rules, 2012. Intermediary services may also include ancillary services. The AAAR, thus confirmed the advance ruling pronounced by AAR, West Bengal that the services in question were not export of services and were exigible to levy of GST under the GST laws. – Reply By Archna Gupta – The Reply
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