GST AAR: Acting as a marketing, recruiting or referral consultant to foreign universities can qualify as exports

May 16, 2024

In a recent ruling, the Telangana Bench of the Authority of Advance Ruling (AAR) clarified that the provision of services of marketing, recruitment, or referrals to foreign universities by the Center for International Admission and Visas (CIAV), the applicant, on a principal-to-principal basis does not constitute an ‘intermediary service’. Further, such services should be considered as exports, which are not subject to goods and services tax (GST), provided the payments are received in convertible foreign exchange.

The applicant had entered into agreements with various foreign universities and colleges. Broadly, its role involves referring aspiring students who wish to study abroad to universities or colleges outside India. However, the applicant was not obligated to refer a student to a particular college or university, but rather it referred each case based on the merits of the student and the fit with the college or university. It did not have the authority to accept an applicant or guarantee a student applicant’s acceptance by the concerned university or college. It worked as an independent contractor. While it was located in India, the recipients of its services (foreign universities and colleges) were situated outside India.

The AAR bench held that since the applicant's services are provided on a principal-to-principal basis they should be considered as 'export of service' provided the payments are received in convertible foreign exchange.

[The Times of India]