Mumbai: The Authority for Advance Rulings (AAR) has held that services performed by Global Reach Education Services, which promoted courses of foreign universities among prospective students in India, cannot be regarded as ‘export of services’. Thus, these services would attract GST.
Global Reach, based in Kolkata, had sought a ruling from the West Bengal AAR on whether the services performed by it could be considered as an export and therefore a zero-rated supply, which would not attract GST under the Central (CGST) Act and the West Bengal State GST Act.
The company had tied up with various foreign universities. Services performed by it entailed making prospective students aware of the courses on offer as also the fees and other costs of the university programmes. Its services also included providing market intelligence to the universities on educational trends in the territory and ensuring payment of fees to the universities from students that had enrolled. Foreign universities typically use such services, which are more cost-effective than having their own representative offices across India, for interacting with prospective students.
Various conditions need to be met for a service to be regarded as an export, and thus zero-rated under GST. For one, the supplier of services must be located in India. Also, the recipient of the services and the place of supply of services must be outside India. The payment for such services must be received in convertible foreign exchange and, lastly, the supplier must be an independent service provider. If any one of the conditions is not met, then the supply of services cannot be treated as an export.