TMI Blog2020 (12) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... to principal basis and is not facilitating a provision of service between two persons. It also needs to be mentioned that in few cases appellant in addition to the above service has also undertaken the activity of providing market intelligence about the requirements of the intending students. This also shows that the appellant is providing a service directly to the Universities/Colleges and not to any person on behalf of the Universities/Colleges. This fact is itself contradictory here as the appellant himself is accepting that only in few cases they were providing their services directly on principle to principle basis. It shows that they are themselves accepting that they are providing intermediary services. The appellants were engaged by the foreign universities/institutes to represent them in the territory of India who in-turn acted as their education/recruitment agent to perform the services in the territory of India. That such services provided by the appellants were only as a representative of the foreign universities and not as an independent service provider providing services on their own account. The Section 13(8)(b) of the IGST Act, 2017, provides that the place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CGST-001-APPL-JC-11-15-2020-21 in Appeal No. 01-05/ADC/A/GST/CHD/2020-21 - - - Dated:- 17-12-2020 - Dr. Ravindra Kumar, Joint Commissioner (Appeals) ORDER Five appeals have been filed by M/s. CANAM Consultants Ltd., SCO 83-84, FF, Sector 17-D, Chandigarh (hereinafter referred to as the appellant ) against five separate GST RFD-06 i.e. Refund Rejection Orders (hereinafter referred to as the impugned orders ) passed by the Deputy Commissioner, Central Goods Services Tax Division-1, Chandigarh (hereinafter referred to as the sanctioning authority ) as per details contained in Table-A appended below :- TABLE-A (Amount in Rupees) S. No. Appeal No. Impugned Order(s) Period Involved Amount of Refund Claimed (IGST) Refund Amount Rejected 1 D5/20-21 ZQ0405200063816, dated 9-5-2020 October, 2017 76,79,331/- 76,79,331/- 2 D1/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s means the supply of any service when the place of supply of service is outside India , but in the instant case the place of supply of services was within India. Further, the refund claim has also been alleged as time barred. Involvement of unjust enrichment has also been alleged. 3. That the said five Show Cause Notices were decided vide the impugned orders as detailed below :- TABLE-B (Amount in Rs.) S. No. Show Cause Notice No. date Period involved Amount Impugned Order Decision 1 ZZ0404200283804, dated 23-4-2020 October, 2017 76,79,331/- ZQ0405200063816, dated 9-5-2020 Rejected 2 ZY0404200283537, dated 23-4-2020 November, 2017 65,25,256/- ZR0405200063861, dated 9-5-2020 Rejected 3 ZZ0404200283904, dated 23-4-2020 Dece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egory of intermediary service. In the SCN there was no specific allegation to the effect that as to how the service of the appellant was intermediary service had been made. 4.3 That the appellant further submitted that there is nothing in the impugned order to justify that they fell under the definition of intermediary . For a person to be an intermediary , he has to be an agent and he should have provided or facilitated the provision of service between two, or more persons and that impugned orders did not establish as to how the appellant satisfied these ingredients. 4.4 That the activity of the appellant was that of marketing and promotion of the academics/universities/colleges and their courses, as they advised the students to join courses of their clients. That the actions of the appellant had the effect of enhancing the intake of students in the Educational Institutes, which in turn enhances the business of their clients. That their activity was akin to that of a Marketing Agency which undertakes the marketing/promotion activity for its client and gets remuneration on the basis of the quantum of business generated for the client. That, therefore, the appellant was prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not fall under the definition of intermediary , hence, Section 13(8)(b) of the IGST Act does not apply in this case. 4.6 That the prospective student had to clear certain international entrance exams such as IELTS, TOEFL, SAT, GMAT, MCAT, LSAT, GRE etc. to get admitted in the foreign colleges/universities and Universities/colleges reserved the right of admission and similarly, the students reserved the right of choice of course and university. That whether the university enrolled a particular student to its course depended on various factors including the score of the student in the entrance exams, good performance in competition exams also help students to get them scholarship and financial assistance. 4.7 The appellant has relied upon the decision of the Hon ble CESTAT in favour of the assessee in the case of M/s. Sunrise Immigration Consultants (P) Ltd. v. CCE, Chandigarh vide Final Order No. A/62221/2018-CU(DB), dated 16-3-2018. 4.8 That the sanctioning authority has erred in relying on a decision dated 22-1-2018 passed by West Bengal Authority for Advance Ruling. That the decision of the Advance Ruling authority is binding only on the party seeking the advance rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the light of these. 6. I have gone through the impugned orders, the facts grounds of appeal, documents placed on record and submissions made at the time of personal hearing. I observe that the issues to be decided before me are : (i) Whether the refund claims filed by the appellant were time barred or not? (ii) As to whether the services provided by the appellants were covered under intermediary services as defined under Section 2(13) of IGST Act and applicability of Section 13(8)(b) of the IGST Act, thereon? 6.1 Firstly, I take up the issue of the refund claims being time-barred. I have carefully gone through the contentions of the appellant that they had filed the refund claim for the month of October, 2017 on 31-10-2019, however the same was finally submitted on 27-2-2020 after going through many rounds of deficiency memos. The dates of original filing of the refund claims, issuance of deficiency memos thereto and their final acceptance has been tabulated as under :- Month October, 2017 November, 2017 December, 2017 January, 2018 February, 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued; that as a result, the assessee was not able to file the refund claim for the subsequent period when a Deficiency memo for the earlier period was pending; that this particular function of the common portal is not in tune with the provisions of law as there is no legal provision under the CGST/IGST Act which prohibits the filing of the refund claim in a situation where the Deficiency Memo issued for the earlier period is pending and that had there been no such restriction on the common portal, the refund claims would have been filed much ahead of time. 6.3 From the above table I find that the refund for the month of October, 2017 was filed on 31-10-2019 that is within expiry of two years from the relevant date as stipulated under Section 54(1) of the CGST Act, 2017. Further, I agree with the contention of the appellant that they were not able to file the refund claims for the subsequent period on the common portal because deficiency memo for earlier period was pending. I hold that the refund claims were not time barred. 6.4 I further, observe that the sanctioning authority has rejected the refund claim of the appellants holding that the service provided to the foreign un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above principal supply. I further find that if the students got enrolled directly by the University through distant education or online services, the appellants were not paid any consideration whether or not it had provided any promotional service. Apart from the above consideration received from the foreign Universities/colleges/academies, the appellants were not receiving any fees or charges from the students or deducted anything from the charges or fees payable by the students to the University. Furthermore, I find the appellant pleaded that the actions of the appellant have the effect of enhancing the intake of students in the Educational Institutes, which in turn enhances the business of their clients. Their activity is akin to that of a Marketing Agency which undertakes the marketing/promotion activity for its client and gets remuneration on the basis of the quantum of business generated for the client. Therefore, the appellant is providing a service of Promotion and Marketing to the university/college on a principal to principal basis and is not facilitating a provision of service between two persons. It also needs to be mentioned that in few cases appellant in addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , an intermediary is a go between the two persons, helps in providing or acquiring or both of a service or goods and comes into picture when there is a possibility of flow of service or goods from one person to another. In the instant case the appellants are a go-between the foreign universities and the students in India though he had contractual agreement with only the universities and the universities only cannot be said to be the only recipients of services provided by the appellants. Therefore, they were covered under the definition of intermediary as per Clause (13) of Section 2 of the Integrated Goods and Services Tax Act, 2017. Hence, the contention of the appellants that their activity was that of marketing and promotion of the academics/universities/colleges is not tenable. 6.12 Further, I observe that the issue of taxability/determining the place of supply of service of an agent/intermediary intermediary services has been taken up by the Hon ble High Court of Gujarat at Ahmedabad in the case of Material Recycling Association of India v. Union of India 2 other(s) in R/Special Civil Application No. 13238 of 2018 with R/Special Civil Application No. 13243 of 2018, dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of section 13(8)(b) of the IGST Act, 2017 considering the place of supply in case of intermediary to be the location of supply of service is in order to levy CGST and SGST and such intermediary service therefore, would be out of the purview of IGST. There is no distinction between the intermediary services provided by a person in India or outside India. Only because, the invoices are raised on the person outside India with regard to the commission and foreign exchange is received in India, it would not qualify to be export of services, more particularly when the legislature has thought it fit to consider the place of supply of services as place of person who provides such service in India. 67. Therefore, there is no deeming provision as tried to be canvassed by the petitioner, but there is stipulation by the Act legislated by the parliament to consider the location of the service provider of intermediary to be place of supply. Similar situation was also existing in service tax regime w.e.f. 1st October, 2014 and as such same situation is continued in GST regime also. Therefore, this being a consistent stand of the respondents to tax the service provided by intermediary in Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these terms conditions in entirety and that they promote courses of foreign universities in taxable territory, arrange or convince to students to join such courses and provide certain ancillary services to both, students as well as foreign universities. That the universities engage the entities like applicant for promotional marketing activities for course taught by them making the perspective students aware about the course fee and other associated costs, market intelligence about course and the latest educational trend/future perspective/job security/placement etc. and that such recruitment services provided to students of the foreign university are not covered under export of services, such services are provided only as a representative of foreign university and not as an independent service provider. Therefore, place of supply shall be under Section 13(8) of the IGST Act, 2017 not under Section (2)(6) of the above Act. Place of supply shall be the location of service provider in taxable territory and will not qualify as export of service. 6.16 The issue under consideration is covered under the ratio of above judgments as the facts and circumstances are similar, I up-hol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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