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

Held

The Court held that the petitioner's services qualify as ‘export’ and not as ‘intermediary’. The Court agreed with the petitioner's submission that for a person to be classified as an ‘intermediary’, there must be an existence of 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 judgment in the petitioner's own case, which held that the petitioner was not an intermediary, and that the scope of services remained the same as examined by the CESTAT in a prior order. The Court also noted that the CBIC Circular dated 20.09.2021 clarified that the provisions for intermediary services under Service Tax and GST regimes are broadly the same. The Court rejected the revenue's argument regarding Clause 1.3(b) of the agreement, stating that the petitioner would be entitled to a refund unless they fell under the category of ‘intermediary’. The impugned order was found to have incorrectly concluded that the petitioner facilitated services between foreign universities, IDP Australia, and students. The Court directed the adjudicating authority to process the refund claim along with applicable interest within four weeks.

Facts

The petitioner, IDP Education India Pvt. Ltd., a subsidiary of an Australian company, entered into service agreements with its parent company. The petitioner provided services related to student placement, information, counseling, and enrollment to students aspiring to join foreign universities. 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.

Key Issues

1. Whether the services supplied by the petitioner qualify as ‘intermediary’ under Section 2(13) of the IGST Act, 2017, or as ‘export’ under Section 2(6) of the IGST Act, 2017, considering the place of provision of services being outside the taxable territory? Petitioner's arguments: The petitioner contended that the definition of ‘intermediary’ excludes a person who supplies services on their own account. They argued that they provide services directly to IDP Australia, not by arranging or facilitating services between others. They relied on a CESTAT order in their own case (pre-GST) which held they were not an intermediary, a CBIC Circular stating no change in the scope of intermediary services between Service Tax and GST regimes, and a Bombay High Court judgment in their own case that applied the CESTAT rationale to the GST regime. They also noted that revenue had sanctioned a refund in pursuance of the Bombay High Court order. Revenue's arguments: The revenue argued that Clause 1.3(b) of the agreement between the petitioner and its principals provided that all fees were inclusive of any tax required to be paid by IDP India, implying the petitioner was not entitled to zero-rated supply as per Section 16(3)(b) of the IGST Act.