Recently, in the case of Global Reach Education Services Pvt. Ltd, (2018) 96 taxmann.com 107 (AAAR-West Bengal), the Appellant Authority for Advance Rulings (AAAR), West Bengal has confirmed the decision of Authority for Advance Ruling (AAR), that the services of-

• promoting the courses of the foreign university in India;
• finding suitable prospective students to undertake the course;
• recruiting and
• assisting in recruiting the suitable students

shall be treated as intermediary services in terms of Section 2(13) of the IGST Act, 2017, and not ‘Export of Services’.

Here, the assessee appealed against the ruling of the AAR, that they are ‘intermediary’ of the Foreign Universities. The appellant contended that they are providing ‘business auxiliary services’ to the Foreign Universities rather than intermediary services, as they provide services of promoting and marketing of Foreign Universities courses in India on their own account which does not include the function of an intermediary as to facilitation and arrangement of supply of goods or services between two or more persons.

The AAAR here observed that the in the instant case, the appellant was free to refer students to various foreign universities of its choice. Further, the fee paid to the Appellant was not tied to the promotional activities or expenses incurred to promote the courses of foreign universities but as a percentage of fee paid by the students who got admitted to the universities. Thus, no consideration was paid in spite of incurring expenses by the Appellant for promoting activities of universities, if no student joined the university.

Whereas, in the case of M/s Sunrise Immigration Consultants Private Ltd. v. CCE & ST, Chandigarh, cited by the appellant, the AAAR observed that the order passed there by the Tribunal was completely different from this case. As in that case, the tribunal considered the ‘intermediary' under Rule 2(f) of the Place of Provision of Service Rules, 2012 (POPS), in relation to ‘main service'. Further, the definition of ‘intermediary’ under Section 2(13) of the IGST Act, is not 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 the ancilliary services, whereas under POPS Rules, the intermediary arranges/facilitates for the provisions of services of the main service provider.

Therefore the services provided carried out by the appellant would be considered as an intermediary in terms of Section 2(13) of the IGST Act.