Recently, Delhi High Court (Delhi HC) delivered a landmark ruling that educational consultancy services provided by Indian firms to foreign universities – for recruiting Indian students and securing admissions abroad — should be classified as “export of services”, and not as “intermediary services”.
📚 Background & Dispute
The case involved an Indian consultancy firm that entered into a contract directly with a foreign university, under which the consultancy provided marketing, counselling, admission‑processing and related services to Indian students. Upon successful admission of students, the foreign university paid commission to the Indian firm in convertible foreign exchange.
The tax authorities contended that the consultancy was acting as an “intermediary” under Integrated Goods and Services Tax Act, 2017 (IGST Act), particularly under Section 2(13), meaning the firm was merely arranging or facilitating the supply between students and university — which would disqualify it from export benefits.
⚖️ Court’s Reasoning & Judgement
The Delhi HC, upholding the decision of Customs, Excise and Service Tax Appellate Tribunal (CESTAT), observed that the consultancy was not just facilitating or brokering: it was providing independent consultancy and recruitment services directly to the foreign university. Thus, it was a “principal‑to‑principal” contract, not an agency/intermediary arrangement.
The definition of “intermediary” under IGST requires a person to arrange or facilitate supply between two other persons. Since here the consultancy itself provided the service (and not just arranged another supplier), it does not meet the definition of an intermediary.
Therefore, the services qualify as export of services under Section 2(6) of the IGST Act, which allows such services to be zero‑rated or eligible for refund of GST paid — subject to usual conditions (recipient outside India, payment in foreign exchange, place of supply outside India, etc.).
🎯 Significance & Implications
This ruling brings clarity to a longstanding contentious issue for overseas‑education consultancies and agents: many such consultancies have been uncertain whether they qualify for export benefits or are treated as intermediaries. Now, with a binding High Court ruling (and similar decisions from CESTAT and the Supreme Court of India), a large number of consultancies can legitimately claim GST refunds/zero‑rating under export of services.
The decision affirms that as long as the contract and consideration are directly between the Indian consultancy and the foreign university — and the consultancy provides the full range of services (marketing, counselling, admission support) — the services should be treated as exports.
This also reduces regulatory and tax burden on consultancies facilitating overseas education, thereby potentially encouraging more firms to act as legitimate consultants rather than informal middlemen.
✅ Conclusion
The Delhi High Court’s judgment marks a welcome and clarifying development for the educational consultancy sector that works with foreign universities. By treating such consultancy services as “export of services” — rather than as mere “intermediary services” — the ruling enables rightful GST benefits for consultancies, ensures compliance clarity, and fosters a more transparent, lawful environment for Indian firms helping students realise their overseas education dreams.
