GST UPDATE

Hon’ble Authority: GSTAT, Principal Bench
Case Title: M/s Navitas Eduservices Private Limited v. Commissioner of CGST, South Delhi
Appeal No. & Citation:

Hon’ble Judge(s)	Dr. Sanjaya Kumar Mishra, President, GSTAT & Hon’ble Sh. Anil Kumar Gupta, Member (Technical)
Date of Order	14.10.2026
Outcome	Appeal Allowed

Brief Facts of the Case

M/s Navitas Eduservices Private Limited is an Indian subsidiary of Navitas Pty Limited, Australia, was engaged in providing marketing support, promotional, business support and IT-enabled services to its overseas parent company. Navitas India operated under a Master Services Agreement and received consideration from Navitas Australia on a cost-plus basis, comprising its costs plus a 16% markup, in convertible foreign exchange. The agreements described the parties as independent contractors and expressly excluded an agency relationship. The Appellant filed refund applications under Section 54 of the CGST Act, 2017 seeking a refund of unutilised input tax credit attributable to the export of services without payment of tax. The refund claims were rejected primarily on the ground that the services constituted intermediary services and, therefore, did not qualify as exports. Five appeals were filed by Navitas India before the GSTAT challenging the rejection of refund claims, while the Department filed one appeal challenging the First Appellate Authority's decision to annul an adjudication order and direct reconsideration of the matter. All appeals were discharged together.

Question before Hon’ble Authority

Whether the marketing support, business support and IT-enabled services supplied by Navitas India to Navitas Australia qualified as export of services under Section 2(6) of the IGST Act or constituted intermediary services under Section 2(13)?

Whether the First Appellate Authority could annul an order and direct the adjudicating authority to reconsider the matter, in view of the express prohibition on remand under Section 107(11) of the CGST Act?

Brief Arguments by Appellant

All Conditions for Export of Services under Section 2(6) of the IGST Act, 2017 are fulfilled

The learned Counsel for the Appellant submits that all five conditions prescribed under Section 2(6) of the IGST Act, 2017, for qualifying a supply as export of services are fulfilled in the present case. The supplier, i.e., Navitas India, is located in India, whereas the recipient, Navitas Australia, is located outside India. The place of supply is outside India under Section 13(2) of the IGST Act, as the services supplied by the Appellant do not constitute intermediary services. Further, the payment is received in convertible foreign exchange, i.e., Australian Dollars, and the supplier and recipient are separate legal entities and not merely establishments of a distinct person.

Services Supplied on Own Account and Not Intermediary Services

The learned Counsel submits that the Appellant does not qualify as an intermediary under Section 2(13) of the IGST Act, 2017, as it supplies services on its own account, which are expressly excluded from the definition of intermediary. Further, there is no tripartite arrangement, as the contract, invoicing and flow of consideration are all between the Appellant and Navitas Australia. Appellant provides services in its own capacity as a sub-contractor. The contract expressly denies any agency relationship or authority to bind Navitas Australia. The learned Counsel relies upon Circular No. 159/15/2021-GST dated 20.09.2021, which clarifies that a person supplying services on his own account, including as a sub-contractor, does not qualify as an intermediary merely on that account.
It is further submitted that the presence of Advisors does not alter the nature of the services supplied by the Appellant. The Advisors are separately contracted by Navitas Australia and are paid on a commission basis, whereas the Appellant receives consideration on a cost-plus basis for its own services.

Section 13(3)(b) of the IGST Act Is Not Applicable

The learned Counsel contends that Section 13(3)(b) of the IGST Act applies only to services supplied to an individual where the physical presence of the recipient or a person acting on behalf of the recipient is required. Since Navitas Australia is a body corporate, the said provision is not attracted in the present case. Accordingly, the place of supply is governed by the general rule under Section 13(2) of the IGST Act. Reliance is placed upon Vodafone Idea v. Union of India (2022) 66 GSTL 63 (Bom.) and Cube Highways v. Union of India (2023) 77 GSTL 387 (Del.).

Original and Appellate Orders Are Non-Speaking and Violate Natural Justice

The Appellant submits that the Original and Appellate Orders are non-speaking and cryptic, having been passed without considering the detailed submissions and evidence placed on record which is a clear violation of the principles of natural justice.

Unjust Enrichment Is Not Applicable to Refund of Unutilised ITC on Zero-Rated Supplies

The learned Counsel submits that the principle of unjust enrichment does not apply to the refund of unutilised input tax credit arising from zero-rated supplies, as the incidence of tax has not been passed on to any other person. The invoices raised by the Appellant on Navitas Australia did not charge GST, and the receipt of consideration in convertible foreign exchange is corroborated by the Foreign Inward Remittance Certificates (FIRCs). Accordingly, the refund claim cannot be rejected on the ground of unjust enrichment.

Reliance on various Judicial Precedents

Reliance was placed on various judicial precedents like M/s Ernst & Young Limited v. Additional Commissioner, CGST Appeals-II, Delhi (2023) TMI 1117 (Del.) and M/s Mc Donalds India Pvt. Ltd. v. Additional Commissioner, CGST Appeals-II, Delhi (2023) TMI 1123 (Del.), 2023 SCC OnLine Del 1764 & 2023 SCC OnLine Del 3089 to argue that similar services have been held to be export of services and not intermediary services.

Claim for Interest on Delayed Refund

The learned Counsel further claims interest on the delayed refund under Section 56 of the CGST Act, 2017, on the ground that the refund has not been granted within the prescribed period.

Brief Arguments by Respondent

Services Supplied by the Appellant Qualify as Intermediary Services

The respondent submits that the services supplied by the Appellant fall within the definition of “intermediary” under Section 2(13) of the IGST Act, 2017. It is contended that the Appellant’s own documents, including the Subject Agreement and Transfer Pricing (TP) Report, describe activities such as supporting Advisors, participating in agent-run exhibitions, liaising between Navitas Australia and recruitment agents, and assisting in student recruitment and admission processes. These activities do not constitute the principal education services on its own account.

Existence of Three Parties and Two Distinct Supplies

The arrangement involves three parties, namely, Navitas Australia, Partner Universities and students/Advisors, along with two distinct supplies: the principal supply of education services and the ancillary supply of facilitation services rendered by the Appellant. It is contended that these elements satisfy the requirements of intermediary services as clarified under Circular No. 159/15/2021-GST dated 20.09.2021. The Department argues that the Appellant’s claim of acting as a sub-contractor is misconceived because it does not provide the principal education services but merely facilitates their supply.

Place of Supply under Section 13(3)(b) of the IGST Act

The Department submits that, for certain periods, Section 13(3)(b) of the IGST Act, 2017, is applicable because the services required the physical presence of the recipient in India. Accordingly, it is contended that the place of supply is in India for the relevant periods, and the supplies do not qualify as export of services.

Applicability of the Principle of Unjust Enrichment

The learned Authorised Representative submits that the Appellant has failed to establish that the incidence of tax has not been passed on to any other person. Accordingly, the Department contends that the bar of unjust enrichment under Section 54(8) of the CGST Act, 2017, is attracted and the refund claim is not admissible.

Reliance on Judicial Precedents

Case law	Department’s reliance
Airbus Group India (P.) Ltd., (2021) 54 G.S.T.L. 194 (A.A.R. – GST – Kar.)	The applicant provided vendor identification and quality monitoring services to its foreign holding company. The Authority held that the applicant was an intermediary as it facilitated supplies between the foreign company and Indian vendors.
Global Reach Education Services (P.) Ltd., (2018) 12 G.S.T.L. 387 (A.A.R. – GST)	The applicant promoted courses offered by foreign universities in India and received commission. The Authority held that the applicant qualified as an intermediary.
Toshniwal Brothers (SR) (P.) Ltd., (2018) 18 G.S.T.L. 129 (A.A.R. – GST – Kar.)	The applicant provided support services to its foreign parent. The Authority held that the applicant was an intermediary.

Findings and Judgement

Appellant is an Intermediary as Conditions Required to Qualify as an Intermediary ae fulfilled

Relying upon the judgment of the Punjab and Haryana High Court in Genpact India v. Union of India, (2022) 1 Centax 226 (P&H), the Tribunal observed that three essential conditions must be satisfied for a person to qualify as an intermediary:

There must be a principal-agent relationship between the parties.
The person must arrange or facilitate the provision of the main service by a third party to the recipient.
The person must not himself perform the main service intended to be received by the service recipient.

The Tribunal noted that the role of an intermediary is to mediate between the principal service provider and the beneficiary receiving the main service. A person who actually supplies the main service on his own account is expressly excluded from the definition. Applying these principles, the Tribunal found that the Appellant was engaged as an independent contractor and that the contractual clauses expressly excluded an agency relationship. The Appellant had no authority to bind Navitas Australia or incur obligations on its behalf without prior written instructions.

Subcontracting of Services Does Not Constitute Intermediary Services

The Tribunal noted that the CBIC vide Circular No. 159/15/2021-GST dated 20.09.2021 requires a minimum of three parties and two distinct supplies: the main supply between two principals and the ancillary supply of arranging or facilitating that main supply. The Circular also clarifies that where a subcontractor supplies the main service to the principal contractor on a principal-to-principal basis, the subcontractor does not become an intermediary merely because the service is rendered to the principal contractor's customer.
In the present case, the Appellant supplied marketing support and IT-enabled services to Navitas Australia under a subcontracting arrangement. The Appellant performed its contractual obligations using its own resources and infrastructure and received consideration on a cost-plus basis. It did not merely arrange or facilitate the supply of education services between Navitas Australia, Partner Universities and students. Accordingly, the Appellant's services fell within the exclusion for services supplied on its own account.

Reliance on the various judicial Judgment

The Tribunal discussed the judgment of the Punjab and Haryana High Court in Genpact India v. Union of India, (2022) 1 Centax 226 (P&H), wherein the petitioner supplied business process outsourcing services to an overseas entity under a master services subcontracting agreement. The High Court held that the existence of contractual arrangements governing the manner in which work is performed does not establish that the service provider arranges or facilitates a third party's supply. The Tribunal applied this reasoning to the instant case and held that the Appellant's activities constituted the actual performance of contracted services rather than facilitation of a separate principal supply. The mere fact that the services supported the overseas recipient's business or related to its customers did not change their essential character.
The Tribunal relied upon Columbia Sportswear India Sourcing (P.) Ltd. v. Union of India, [2025] 174 taxmann.com 936 (Karnataka), and Pr. Commissioner, Central Excise and CGST – Delhi South v. Blackberry India Private Limited, 2023 SCC OnLine Del 4467. In Columbia Sportswear, the Indian subsidiary provided market research, supplier identification, factory visits, production monitoring, shipment tracking and documentation support to its foreign parent. The Karnataka High Court held that the Indian entity was an independent service provider and not an intermediary because it supplied services on its own account, had no authority to bind the foreign recipient, and was remunerated on a cost-plus basis rather than through commission linked to successful transactions. The Tribunal found these principles applicable to Navitas India. The Appellant's independent contractual status, cost-plus remuneration and lack of authority to bind Navitas Australia supported the conclusion that the services were business support services supplied on a principal-to-principal basis.

Education Consultancy and Recruitment Support Services Are Not Necessarily Intermediary Services

The Tribunal placed particular reliance upon the judgment of the Delhi High Court in FATEH Education Consulting (P.) Ltd. v. Assistant Commissioner, 2026 SCC OnLine Del 3200. High Court held that education consultancy, marketing and recruitment support services provided by an Indian entity to foreign universities do not become intermediary services merely because the Indian entity identifies prospective students or assists them during the admission process. The relevant considerations include the contractual recipient of the services, the person liable to pay the consideration, the nature of the services rendered, and whether the Indian entity acts as an agent or facilitates a separate supply.
The Tribunal observed that Navitas India was engaged to provide marketing and IT-enabled support services to Navitas Australia. The Advisors were separately engaged by Navitas Australia under independent agreements and were paid on a commission basis, whereas Navitas India received cost-plus consideration. The Appellant was neither a party to the Advisor Agreements nor responsible for providing or receiving services under those agreements. Accordingly, incidental assistance in student recruitment and admission did not convert the Appellant's independent services into intermediary services.

Advance Rulings Relied Upon by the Department Were Not Followed

The Department relied upon the decisions of the various Advance Ruling Authorities. The Tribunal however observed that Advance Ruling Authorities are not courts of record and held that, in view of the judgments rendered by various High Courts on the relevant legal principles, it was inclined to follow the High Court judgments rather than rely upon the cited advance rulings.
After applying the above principles to the facts, the Tribunal concluded that the services provided by Navitas India did not fall within the definition of intermediary services
Consequently, the services qualified as export of services under Section 2(6) of the IGST Act, 2017. The Tribunal set aside the impugned orders passed by the First Appellate Authority and directed the Department to refund the unutilised input tax credit along with applicable interest.
With respect to the Appeal filed by the Department where the matter was remanded
The First Appellate Authority could annul the order but could not remand the matter to the adjudicating authority. The Tribunal examined Section 107(11) of the CGST Act, which empowers the First Appellate Authority to confirm, modify or annul the order appealed against, but expressly prohibits referring the case back to the adjudicating authority.
It held that the statutory prohibition could not be circumvented merely by describing the direction as an order of annulment followed by reconsideration. Where the effect of the order is to send the matter back to the original adjudicating authority for fresh consideration, it amounts to a remand prohibited by the statute. The Tribunal accordingly allowed the Department's appeal to that extent and remitted the matter to the First Appellate Authority for consideration on merits, consistently with the legal principles laid down in the order. The Tribunal also clarified that the position of the GSTAT is different. In exercise of its powers under Section 113(1) of the CGST Act, the Tribunal may, in its discretion, remand a matter to the First Appellate Authority, a Revisional Authority or the original adjudicating authority.
Accordingly, the Department's appeal concerning the prohibited remand was allowed to the limited extent of directing the First Appellate Authority to reconsider the matter on merits.

Author’s Comment

The judgment is likely to provide substantial relief to Indian education consultants and other service providers engaged by foreign universities, educational institutions and overseas businesses. In practical terms, Indian entities providing student recruitment support, admission assistance, coordination with overseas institutions, and related consultancy services may claim refund of accumulated ITC where their services satisfy the conditions for export of services. Going forward, the focus should shift from the terminology used in agreements to the actual nature of the services performed, the contractual relationship between the parties, and whether the Indian entity independently provides services to the overseas recipient or merely arranges supplies between other parties. This may reduce avoidable disputes and improve cash flow by preventing the blocking of ITC in export-oriented businesses.

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GST update /2026-27/0102

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