Rajasthan HC Rules IDP Education Services are Exports, Not Intermediary under GST:

Rajasthan HC Rules IDP Education Services are Exports, Not Intermediary under GST The dispute concerned the classification of services rendered by an Indian subsidiary of a foreign education company to its Australian parent. The authorities had treated the petitioner as an “intermediary” under Section 2(13) of the IGST Act, thereby denying export status and refund of IGST. The petitioner contended that it provided services directly to its parent company on a principal-to-principal basis and not on behalf of any third party. It argued that its role was limited to providing counselling, guidance, and application processing services for students aspiring to study abroad, while the final authority for admissions rested solely with the foreign entity. The petitioner relied upon the CESTAT’s earlier decision in its own case under the pre-GST regime (Order dated 28.10.2021), which held that such services did not constitute intermediary activity, as well as CBIC Circular dated 20.09.2021 confirming that the scope of “intermediary” remained unchanged from the service tax era. Issue Raised: Whether services rendered by the petitioner to its foreign parent company constituted “intermediary services” under Section 2(13) of the IGST Act or qualified as “export of services” entitled to refund under Section 16(3)(b). HC’s Decision: The Court held that the petitioner’s services were rendered exclusively to its parent company under a bilateral contract, without any privity with foreign universities or students. Since the arrangement involved only two parties-IDP Education India and IDP Australia, it did not satisfy the statutory requirement of three parties necessary to constitute an intermediary transaction. Agreeing with the Bombay High Court and the earlier CESTAT order, the Bench held that the petitioner’s services amounted to exports and not intermediary services. Thus, the impugned orders denying export treatment and refund were set aside. The Court directed the adjudicating authority to process the refund claim and release the amount along with applicable interest within four weeks of uploading the order. To Read Full Judgment, Download PDF Given Below