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GST – Telangana AAR - Section 2(6) and Section 2(13) of the IGST Act, 2017 - Rendering of referral services to overseas entities – ‘Intermediary’ or ‘Export of Services’ – whether the activity of providing services of ‘Marketing/Recruitment/ Referral Consultant’ by the Applicant to foreign universities/colleges on principal to principal basis would qualify as ‘intermediary’ under Section 2(13) of the IGST Act, 2017 or whether the same would be considered as an independent service of ‘Marketing/Recruitment/ Referral Consultant’ by the Applicant to foreign universities/ colleges – HELD - the jurisprudence in Service Tax law should be followed while dealing with the concept of ‘intermediary’ under GST law - the issue of ‘intermediary’ with respect to marketing and referral services by Indian service providers to foreign colleges was raised before the CESTAT in multiple occasions in Service tax regime, wherein the Tribunal has categorically held the Indian services providers not be an ‘intermediary’ – the terms of the underlying agreements between the Applicant and foreign colleges and university amply clarifies that the applicant is not an agent of foreign colleges and university - The terms and conditions of the agreement reflects that the Applicant is under a principal-to-principal contractual relationship with the foreign colleges and university, whereby it is providing its independent and main service of marketing and referral to its service recipient i.e. foreign colleges and university – Further, the necessary conditions for qualifying as ‘intermediary’ i.e. presence of three parties and provision of main service with ancillary service by the facilitator acting as an agent or broker, as per Section 2(13), are not fulfilled by the applicant - the Applicant can be considered to be performing outsourced service of marketing and referral by foreign colleges and university, which is squarely outside the ambit of ‘intermediary’ - The Applicant cannot be construed to have been facilitating services of the foreign colleges and university to the prospective students as students cannot be construed as service recipients particularly in the absence of consideration flowing from them to the applicant. Therefore, the Applicant cannot be considered as ‘intermediary’ for the purpose of Section 2(13) of IGST Act - the activity of the applicant for foreign college and university should qualify as ‘export of service’ in terms of Section 2(6) of IGST Act provided the payments are received in convertible foreign exchange – Ordered accordingly - Export of Service - Whether the activity of the Applicant would be liable to levy of GST or would qualify as ‘export of services’ in terms of Section 2(6) of the Integrated Goods and Services Tax Act, 2017 – HELD - the Applicant-Supplier is located in India while the recipient of services i.e. foreign colleges and university are located outside India. Since, the activity of the Applicant is an independent service of ‘marketing/ recruitment/ referral consultant’, the same will fall under Section 13(2) of the IGST Act to determine its place of supply. Accordingly, the place of supply of the services of the Applicant shall be location of recipient of it services i.e. location of foreign colleges and university which is outside India - Further, the Applicant and foreign colleges and university are nowhere related to each other and thus, cannot be treated as establishment of a distinct person in accordance with Explanation 1 to Section 8 of IGST Act - the activity of the Applicant for foreign college and university should qualify as ‘export of service’ in terms of Section 2(6) of IGST Act provided the payments are received in convertible foreign exchange.
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