Marketing/Recruitment/Referral of aspiring students to foreign universities/colleges is not an ‘Intermediary Service’ :  AAR Telangana

The case of M/s. Center for International Admission and Visas (CIAV) before the Authority for Advance Ruling (AAR) in Telangana revolves around the classification of its services provided to foreign universities and colleges.

CIAV operates by entering agreements with foreign universities and colleges to provide referral services for students aspiring to study abroad. They refer students to these institutions based on their merits and compatibility with the college or university’s requirements. CIAV is paid a commission by the foreign institutions for successful admissions resulting from their referrals.

The issue at hand is whether the company qualifies as an ‘intermediary’ as defined under Section 2(13) of the IGST Act and whether its activities qualify as ‘export of services’ as per Section 2(6) of the IGST Act.

Telangana AAR ruled that the applicant providing referral services to foreign universities is not an “intermediary” as per GST Act definitions because the service is provided independently and not on behalf of the students, establishing a principal-to-principal relationship with the universities.

The referral service, earning commission in convertible foreign exchange from foreign universities for successful student admissions, qualifies as an ‘export of service’ under the IGST Act.  Further, the authorities rule that the company’s activities activity qualifies as “export of services” under Section 2(6) of the IGST Act, subject to receiving payments in convertible foreign exchange.

The copy of the order is as under: