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.
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.
The AAR bench noted that the applicant (Global Reach) was paid a commission, which was a percentage of the tuition fees collected from students enrolled through it. The company represented universities in India and acted as their recruitment agent. Thus, the ‘place of supply’ — which is the foundation based on which GST applies — was in India. As all conditions need to be met for treating a supply of a service as an export, it was clear that Global Reach did not meet the condition that the supply of services must be outside India. Thus, the services provided by it would attract GST.