Educational Consultancy Services to Foreign Universities Qualify as Export, not “Intermediary Services”: Delhi HC [Read Order]

ediary services under the Service Tax Regime.

In the recent ruling, the Delhi High Court upheld CESTAT’s ruling that student recruitment services provided to foreign universities constitute export of services, not intermediary services. Thus, the court dismissed the revenue’s appeal on finding no substantial question of law.

The Present appeal had been filed by the Appellant, the Commissioner of Central Tax, CGST Delhi East under Section 35G of the Central Excise Act, 1944, assailing the impugned order dated 13th December, 2024 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (CESTAT).

The Respondent, T C Global India Pvt Ltd., had been allowed by CESTAT and it had been held that the respondent was not an ‘intermediary’ in terms of Rule 2(f) of the Place of Provision of Services Rules, 2012 wherein the services rendered by the Respondent constitute export of services under Rule 6A of the Service Tax Rules, 1994.

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The Department issued a Show Cause Notice dated 17th December, 2015, alleging that the Respondent's services qualified as 'intermediary services' under Rule 2(f) of the Place of Provision of Services Rules, 2012 (POPS Rules). The SCN proposed to raise a demand of service tax of Rs. 15,58,58,003/- along with interest under Section 75 of the Finance Act, 1994 and penalties under Section 77 and 78(1) of the Finance Act, 1994.

Section 75 of the Finance Act, 1994 explained that: Interest on delayed payment of service tax

“Every person, liable to pay the tax in accordance with the provisions of section 68 or rules made thereunder, who fails to credit the tax or any part thereof to the account of the Central Government within the period prescribed, shall pay simple interest at such rate not below ten percent and not exceeding thirty six percent per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette, for the period by which such crediting of the tax or any part thereof is delayed.”

The Authority through the Order-in-Original dated 2nd May, 2017, confirmed the demand, holding the Respondent's services as intermediary services and the SCN as being within the limitation period. Upon appeal, the CESTAT allowed the Respondent's appeal through its order dated 13th December, 2024.

CESTAT concluded that the Respondent's services satisfied all conditions for 'export of service' under Rule 6A of the Service Tax Rules, 1994, and were not intermediary services. It emphasized that the agreements were with foreign universities, consideration was received in foreign exchange, and Indian students were not the service recipients. CESTAT also held the Show Cause Notice to be time-barred.

The Court heavily relied on a consistent line of judicial pronouncements, including its own decision in W.P. (C) 10189/2025 titled Commissioner DGST Delhi vs. Global Opportunities Pvt. Ltd and on the landmark judgement of Ernst & Young Ltd v. Add. Commr. CGST Appeals-II, Delhi, 2023 (73) G.S.T.L. 161 (Del.) which held that the person who supplies the goods and services was not an intermediary and it was only a person who arranges or facilitates the services who would be considered as an intermediary.

The Bench of Delhi High Court consisting of Justice Pratibha M. Singh and Justice Renu Bhatnagar, heard and reviewed the matter.

After considering the judicial precedents, the High Court concluded that the CESTAT's impugned order did not warrant any interference and found no substantial question of law arising in the present case. The court stated that services offered by the Respondent were not intermediary services.

Thus, the present appeal was dismissed.

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