Supreme Court vide Order dated 25 August 2025 dismissed SLP, thereby upholding the High Court ruling that services relating to admission of Indian students into foreign universities qualify as export of service. In a significant ruling, the Bombay High Court in Nagpur had addressed the classification of services provided by KC Overseas Education Pvt. Ltd., a company that facilitates admissions for Indian students into foreign universities. The court examined whether these services should be considered as "export of services" under the Integrated Goods and Services Tax (IGST) Act or if they fall under the category of intermediary services, which are taxable in India. The petitioner, KC Overseas, received payments directly from the foreign universities in foreign currency, but the tax authorities had previously denied them export benefits and a refund, labeling them as intermediaries.
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The High Court court's decision, dated 03 March, 2025, revolved around the interpretation of the IGST Act, particularly Sections 2(6), 2(93), and 13(2). The division bench concluded that the services provided by KC Overseas indeed qualify as export services because the recipient and the payment originate from outside India. This interpretation aligns with a precedent set by the Delhi High Court in the Ernst & Young Ltd. case, as well as a 2023 order from the Service Tax Tribunal in a similar case involving the petitioner.
As a result, the court quashed the previous order from March 2024 that denied the refund, ruling in favor of KC Overseas. The company is now entitled to a refund of the GST paid, contingent upon the receipt of consideration in foreign currency. This judgment underscores the importance of correctly classifying cross-border services under GST laws, providing clarity for businesses engaged in similar activities.
Order date: 03 Mar 2025
Parties: KC Overseas Education Pvt. Ltd., Nagpur v. Union of India & Ors.
Facts -
- Petitioner (KC Overseas Education Pvt. Ltd.) facilitates admissions for Indian students into foreign universities. The universities abroad pay consideration directly to the petitioner in foreign currency.
- Department treated petitioner as an intermediary, denied export benefit, and rejected refund. Petitioner challenged rejection order dated 07.03.2024 passed by Additional Commissioner (Appeals).
Issue -
- Whether services provided by KC Overseas to foreign universities amount to “export of services” under Section 2(6) IGST Act or are taxable in India as intermediary services.
Order -
- Supreme Court dismissed revenue SLP, thereby upholding the High Court ruling that services relating to admission of Indian students into foreign universities qualify as export of service.
- The division bench of the Hon’ble high court applied Section 2(6) IGST Act and held that definition of export of services must be read holistically, especially with Section 2(93) (“recipient”) and Section 13(2) (place of supply).
- Following Ernst & Young Ltd. V. Addl. Commr. CGST (Delhi HC), it held that services rendered to foreign universities qualify as export, since the recipient and payment source is located abroad. It also relied on Service Tax Tribunal’s 2023 order in petitioner’s own case, holding that services are provided to universities, not students in India, and thus do not fall within “intermediary” definition (same under service tax & GST).
- Consequently, the impugned order of 07.03.2024 was quashed, petitions allowed, and petitioner held entitled to refund of GST paid, subject to receipt of consideration in foreign currency.
