Delhi High Court clarifies education consultancy services as export of services, enabling significant IGST refund

The Delhi High Court has ruled that education support services provided by an Indian firm to foreign universities are classified as exports of services, paving the way for a ₹2.63 crore IGST refund and setting a precedent for similar cases.

The Delhi High Court has ruled that education consultancy, marketing and recruitment support services provided by an Indian company to foreign universities amount to exports of services, not intermediary activity, clearing the way for an IGST refund of ₹2,63,38,771 plus statutory interest.

In Fateh Education Consulting Private Limited v. Assistant Commissioner, the court found that Fateh Education was operating on its own account under contracts with overseas universities, not as an agent acting between two sides of a transaction. The company said it received payment only from the foreign universities, had no authority to bind them, could not promise admissions and merely helped students incidentally during the application process.

The tax department had rejected the refund after concluding that the company was advertising foreign courses, identifying prospective students and assisting with admissions in return for commission linked to tuition fees. It treated those activities as intermediary services under the Integrated Goods and Services Tax Act and said the arrangement looked more like a principal-agent relationship than a direct supply of services.

The court disagreed. It said the decisive questions were who contracted for the service, who paid for it and what service was actually supplied. Relying on its earlier ruling in Global Opportunities Private Limited and the Bombay High Court’s decision in K.C. Overseas Education Pvt. Ltd., the court held that incidental benefits to students did not change the character of the supply. The refund rejection was quashed and the authorities were directed to release the money, with interest, within two months.