Facts of the Case

The appeal was filed by the Commissioner of Central Tax, CGST Delhi East under Section 35G of the Central Excise Act, 1944 challenging the order dated 13th December, 2024 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi. By the impugned order, the Tribunal allowed the appeal of M/s T C Global India Pvt. Ltd. and held that the services rendered by the respondent to foreign universities did not qualify as intermediary services under Rule 2(f) of the Place of Provision of Services Rules, 2012, and instead constituted export of services under Rule 6A of the Service Tax Rules, 1994. The Tribunal also held that the show cause notice dated 17th December, 2015 was barred by limitation.

The respondent was engaged in providing support and facilitation services to foreign universities, including promotion, student recruitment assistance, liaisoning, and advisory services, pursuant to agreements entered into with more than 240 foreign universities across various countries. The respondent received commission in convertible foreign exchange for such services.

Issues Involved

Whether the appeal was maintainable when it involved questions of taxability, whether the services provided by the respondent constituted intermediary services under the POPS Rules, and whether such services qualified as export of services under Rule 6A of the Service Tax Rules, 1994.

Appellant’s Arguments

The Revenue contended that the respondent acted as an intermediary between foreign universities and Indian students and that, under Rule 9(c) of the POPS Rules, the place of provision of intermediary services was the location of the service provider in India. It was argued that the services were therefore taxable in India and could not be treated as export of services. The Revenue also supported the findings of the adjudicating authority that the show cause notice was within limitation.

Respondent’s Arguments

The respondent submitted that the services were rendered exclusively to foreign universities under contractual arrangements and that Indian students were not recipients of the services. It was argued that consideration was received from foreign entities in convertible foreign exchange and that all conditions under Rule 6A of the Service Tax Rules, 1994 were satisfied. The respondent relied upon consistent judicial precedents holding that such services are not intermediary services and constitute export of services.

Court Order / Findings

The Delhi High Court examined the definition of “intermediary” under Rule 2(f) of the POPS Rules and held that an intermediary is one who merely arranges or facilitates the supply of services between two parties and does not include a person who supplies services on its own account. The Court held that the respondent was providing services directly to foreign universities and was not arranging or facilitating services between foreign universities and students.

The Court relied on earlier decisions including Verizon Communication India Pvt. Ltd., Ernst & Young Ltd., K.C. Overseas Education Pvt. Ltd., Global Opportunities Pvt. Ltd., and Supreme Court rulings in Vodafone India Ltd. and Blackberry India Pvt. Ltd., which consistently held that the recipient of service is determined by the contractual arrangement and the party liable to pay consideration.

The Court upheld the findings of the Tribunal that the services rendered by the respondent satisfied all conditions of export of services under Rule 6A of the Service Tax Rules, 1994 and that Rule 9(c) of the POPS Rules was wrongly invoked. The Court further held that no substantial question of law arose for consideration and declined to interfere with the Tribunal’s order.

Important Clarification

The High Court clarified that the definition of intermediary under the service tax regime is in pari materia with the definition under the GST regime and that judicial consistency has been maintained in treating services rendered to foreign entities for consideration in foreign exchange as export of services when the recipient is located outside India.

Final Outcome

The appeal filed by the Revenue was dismissed. The order dated 13th December, 2024 passed by the CESTAT was upheld, holding that the services rendered by M/s T C Global India Pvt. Ltd. were export of services and not intermediary services, and that the show cause notice dated 17th December, 2015 was barred by limitation. No substantial question of law was found to arise.

SOURCE LINK: https://delhihighcourt.nic.in/app/showFileJudgment/PMS24112025SERTA202025_165913.pdf

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