In Re : M/s. Global Reach Education Services Private Limited
GST
2018 (8) TMI 392 – APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL – 2018 (15) G. S. T. L. 618 (App. A. A. R. – GST)
APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL – AAAR
Dated:- 24-7-2018
APPEAL CASE NO. 01/WBAAAR/Appeal/2018
GST
Mr. Rakesh Kumar Sharma And Ms. Smaraki Mahapatra, Member
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
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issions and challenged this finding on the grounds that the Advance Ruling Authority wrongly considered them as recruitment agent facilitating the recruitment or enrolment of students to Foreign Universities. The Appellant argued that it was providing 'business auxiliary services' to Foreign Universities by promoting their courses and its services are in the nature of marketing and promotion of courses 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 C
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y or required by this Agreement.
The Appellant submitted at the time of Hearing that at present services covered under item (c) above are not being provided, though no such variance of the Agreement was submitted in support of thereof.
The Appellant placed reliance on the Ruling of the Authority For Advance Rulings (Central Excise, Customs and Service Tax), New Delhi, dated 04.03.2016, in the matter of the applicant GoDaddy 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
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persons but does not include a person who provides the 'main service' on his account. The Applicant further submitted that the service rendered by college to student is imparting of education and service between borrower and bank is money lending and had has no concern with education imparted by colleges/universities and money lent by bank. The Applicant submitted that he was providing Business Auxiliary Service to his clients 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 p
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eard the Appellant and the submissions are considered.
First of all, the 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 as Clause 3.1 of the Agreement with Australian Catholic University clearly stipulates Appellant's main responsibilities that it, inter alia, shall-
(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 wit
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call centers. Further, the applicant will not be engaged in arranging or facilitating provision of services by GoDaddy US to customers in India. Furthermore, the applicant will not secure orders from customers in India or arrange or facilitate the provision of any service by any third party service provider to GoDaddy US. The on)y service to be performed by the applicant is provided to GoDaddy US on a principal-to principal and arm'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
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provides the main service or supplies the goods on his account.”
The definition of 'intermediary' under Clause (13) of Section 2 of the Integrated Goods and Services Tax Act, 2017, is 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 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;
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 a
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