Services provided to Universities in foreign Countries as Export of Services cannot be Treated as ‘Intermediaries’ u/r Rule 2(f) of Place of Provision of Service Rules: CESTAT [Read Order]

The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the services provided to universities in foreign countries as export of services cannot be treated as ‘intermediaries’ under rule 2(f) of the Place of Provision of Service Rules,2012. 

Krishna Consultancy, the appellant assessee was engaged in giving guidance to prospective students to seek admissions in universities located outside India and does not collect any consideration from prospective students they had entered into contracts with the universities abroad and arrangements are that when a student guided by the appellant secures admission in a university in the foreign country and pays the fee, a part of the fee was paid to the assessee as commission. 

The assessee appealed against the order passed by the Commissioner (Appeals) for rejecting the refund claim on paid service tax on service provided to foreign countries. 

Vinay Jain, the counsel for the assessee contended that in the case of Sunrise Immigrations Consultants Pvt. Ltd. vs. CCE&ST, the court held that the organization providing free consultations to Indian students cannot be treated as an intermediary. 

Also submitted that no service tax leviable on services which are provided outside India and it was categorized under export of service. 

S.B.P. Sinha, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee had declared their activity to be service provided in India and without revising their return, the assessee was not eligible for a refund. 

The Bench observed that the assessee was not providing any service to prospective students in India and providing service to universities located in foreign countries who are paying consideration to the assessee and the services covered by these proceedings are export of services. 

The two-member bench comprising Anil G. Shakkarwar (Technical) and Dr. Suvendu Kumar Pati (Judicial) held that the assessee was eligible for a refund claim. 

To Read the full text of the Order CLICK HERE

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