Commissioner of Delhi Goods and Service Tax DGST Delhi Vs Global Opportunities Private Limited (Supreme Court of India)
The dispute concerned the eligibility of GST refund claimed on commissions earned from foreign educational institutions for services described as educational consultancy. The core issue was whether such services constituted “export of services” under the Integrated Goods and Services Tax Act, 2017, or whether they were excluded on the ground that the service provider acted as an “intermediary”.
Read HC Judgment in this case: Educational Consultancy Services to Foreign Universities Not ‘Intermediary’; Qualify as Export: Delhi HC
The respondent, based in Delhi, provided educational consultancy services to Indian students seeking admission to foreign universities. Under agreements entered into with foreign educational institutions, the respondent counselled students and facilitated applications. Upon a student securing admission, the foreign university paid commission to the respondent in terms of the agreement. No consideration was charged from the students.
Multiple refund applications were filed for GST paid on such commissions for periods between Financial Years 2018–19 and 2021–22. These refund claims were rejected by the adjudicating authority on the grounds that the respondent was an “intermediary” under Section 2(13) of the IGST Act, that the services were not “export of services”, that some claims were time-barred, and that procedural deficiencies existed.
On appeal, the Appellate Authority reversed the rejection orders and allowed the refunds. It held that the respondent was not acting as an agent of the foreign educational institutions, that the institutions retained the right of admission, and that the relationship between the parties was on a principal-to-principal basis. The Appellate Authority concluded that the respondent was providing marketing and consultancy services to foreign entities, which qualified as “export of services” under Section 2(6) of the IGST Act.
The Department challenged these appellate orders before the Delhi High Court, contending that the respondent was an intermediary, that certain agreements described the respondent as an “agent”, and that Section 13(8) of the IGST Act deemed the place of supply to be the location of the supplier, thereby disqualifying the services from export status.
The High Court examined the statutory definitions of “export of services”, “intermediary”, and the place of supply provisions under Sections 2(6), 2(13), 13(2), and 13(8) of the IGST Act. Relying on earlier decisions, including those holding that a person supplying services on its own account is not an intermediary, the Court emphasised that an intermediary merely arranges or facilitates supply between two parties and does not itself supply the service.
Applying these principles, the Court found that the respondent was directly supplying consultancy services to foreign educational institutions, which were the recipients of the service and were liable to pay consideration. The fact that Indian students benefitted from such services did not alter the identity of the service recipient. The respondent was therefore not an intermediary.
The High Court also relied on precedents from various High Courts, CESTAT, and dismissals of special leave petitions by the Supreme Court of India, which consistently held that similar educational consultancy services rendered to foreign universities constituted export of services and were not intermediary services.
In addition, the Court noted that the GST Council had recommended omission of clause (b) of Section 13(8) of the IGST Act to remove ambiguity regarding intermediary services and to enable exporters to claim export benefits. This development further supported the view that the refund claims were justified.
Accordingly, the High Court dismissed the writ petition filed by the Department and directed that refunds be processed and granted with applicable statutory interest within two months.
The matter was carried to the Supreme Court by way of a special leave petition. The Supreme Court declined to interfere with the High Court’s judgment and dismissed the petition. However, it extended the time for refund by two months from the date of its order. All pending applications were disposed of.
As a result, the appellate orders granting GST refund to the respondent stood affirmed, and the legal position that such educational consultancy services to foreign universities are not intermediary services and qualify as export of services was upheld.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
