AAR Rules Student Recruitment Services for Foreign Universities Not ‘Intermediary Services’

The applicant, M/s. Eduguide Overseas Studies Private Limited, provides a range of services to overseas universities located in countries like the UK, USA, and Canada, including promoting the universities, identifying prospective students in India, assisting students with the application and visa process, and organizing promotional events.  The applicant receives fee or commission from the foreign universities based on the number of students who successfully enroll and pay their tuition fees.

The applicant sought an advance ruling to determine whether these activities constitute “intermediary services” under Section 2(13) of the IGST Act, which would subject them to local GST, or if they qualify as an independent export of services.

Main Issue: Whether the recruitment and marketing services provided by the applicant to foreign universities fall under the definition of “intermediary services” or are provided on a “principal-to-principal” basis.

AAR’s Decision: The Authority for Advance Ruling (AAR) held that the services provided by the applicant do not qualify as intermediary services. The Authority observed that an intermediary is someone who “arranges or facilitates” a supply between two or more persons but does not include those who supply services on their own account.

The applicant was not merely facilitating a contract between the student and the university; rather, they were providing a main service of “advertising and marketing” to the universities to enhance their brand and recruitment in India. Relying on Ernst & Young Ltd, the AAR concluded that the applicant operates on a principal-to-principal basis. As the service provider and service recipient are the only two parties to the service agreement, the “intermediary” tag is not applicable.

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