Idp Education INDIA PVT. LTD. vs. The Union Of INDIA

Held

The Court held that the petitioner's services do not qualify as ‘intermediary’ services. The Court agreed with the petitioner's submission that for a person to be an ‘intermediary’, there must be an existence of at least three parties in the contract. In this case, only two parties, the petitioner and IDP Australia, were involved in a bipartite arrangement. The Court found that the petitioner provided services directly to IDP Australia and did not arrange or facilitate services between foreign universities and students. The Court relied on the Bombay High Court's judgment in the petitioner's own case, which in turn relied on a CESTAT order holding that the petitioner was not an intermediary. The Court noted that the scope of services remained the same despite periodical renewals of the agreement. The Court also considered the CBIC Circular stating no significant change in the definition of intermediary services between the Service Tax and GST regimes. The impugned order was found to have incorrectly concluded that the petitioner facilitated services between foreign universities, IDP Australia, and students, as the petitioner had no say in the final admission process and no contractual arrangement with foreign universities or students. Therefore, the petitioner's services qualified as ‘export’. The Court allowed the petitions and remanded the matter to the Adjudicating Authority for processing the refund claim along with applicable interest within four weeks.

Facts

The petitioner, IDP Education India Pvt. Ltd., a subsidiary of IDP Education Ltd. (Australia), provides student placement and related services to its Australian parent company. The petitioner classified these services as an export of services under the IGST Act, 2017, and claimed a refund of IGST paid. The Original and Appellate Authorities held that the petitioner acted as an intermediary, deeming the place of supply to be India, thus denying the export status and refund. The petitioner approached the High Court under Article 226 of the Constitution, citing the absence of a GST Tribunal and judicial indiscipline. The petitioner highlighted a prior CESTAT order from 2021 in its own case, which held its services were not intermediary services and upheld their export status, a position supported by a CBIC circular and a Bombay High Court judgment.

Key Issues

1. Whether the services supplied by the petitioner to IDP Australia qualify as ‘intermediary’ services under Section 2(13) of the IGST Act, 2017, or as ‘export’ of services as defined under Section 2(6) of the IGST Act, 2017. Petitioner's arguments: The petitioner contended that the definition of ‘intermediary’ under Section 2(13) requires arranging or facilitating services between two or more persons and specifically excludes a person supplying services on their own account. They argued that they provide services directly to IDP Australia, not by facilitating between third parties. They relied on a CESTAT order in their own case (dated 28.10.2021) which held they were not intermediaries, a CBIC Circular (dated 20.09.2021) stating no change in the scope of intermediary services between Service Tax and GST regimes, and a Bombay High Court judgment (in IDP Education India Pvt. Ltd. Vs. Union of India & Ors.) which applied the CESTAT rationale to the GST regime. They also noted that revenue accepted the CESTAT order and refunds were sanctioned in other jurisdictions. Revenue's arguments: The revenue argued that the petitioner’s services qualified as intermediary services, making the place of supply India, thereby denying export status. Clause 1.3(b) of the agreement between the petitioner and its principals was cited, stating that fees were inclusive of any tax required to be paid by IDP India to tax authorities in India, implying the petitioner was not entitled to zero-rated supply under Section 16(3)(b) of the IGST Act.