One of my client who is education institutions who provide advice for further studies in foreign university. He is giving Indian students to overseas university for further education and in return university or his agent is paying commission for same in dollars to our Indian bank current accounts per student as per agreement or mutual arrangement. Whether this services are fall under exports of services? If not then advise taxability in India under GST and give SAC code and GST RATE for such commission receipts.

Reply— As per decision of AAAR, West Bengal in matter of M/S. Global reach education services private limited dated 24.07.2018, Recruitment agent facilitating the recruitment or enrolment of students to Foreign Universities is not ‘Export of Services’ under the GST Act, and eligible to tax.

In the above case, the Appellant promotes the courses of the University, finds suitable prospective students to undertake the courses, and, in accordance with University procedures and requirements, recruits and assists in the recruitment of suitable students, and hence, the Appellant is to be considered as an intermediary in terms of  section 2(13) of the IGST Act. 

Being an intermediary service provider, the place of the Applicant’s supply shall be determined under section 13(8)(b) of the IGST Act and not under section 13(2) of the IGST Act. The place of supply under the above legal framework is the territory of India. As the condition under section 2(6)(iii) of the IGST Act is not satisfied, the Applicant’s service to the foreign universities does not qualify as “Export of Services”, and is, therefore, taxable under the GST Act.

The service provided by your client to foreign university would fall under SAC 9983 and taxable @18%.