Author: Rasika Pitale

Court: Supreme Court of India 

Case Type: Writ Petition (Civil) 

Date of Judgment: September 2025 

Parties: 

Petitioner – KC Overseas Education 

Respondent – Union of India 

Relevant Law: Central Goods and Services Tax Act, 2017 (CGST Act); Integrated GST Act,  2017 (IGST Act) 

INTRODUCTION 

This case addresses the GST liability of overseas education consultants operating in India. The  Supreme Court examined whether services provided by education consultancies facilitating  foreign admissions qualify as taxable intermediary services or as export of services, thereby  exempt from GST. The ruling has significant implications for the education consultancy  industry, clarifying the scope of GST on cross-border educational facilitation services. 

BRIEF FACTS 

KC Overseas Education is an Indian education consultancy firm that assists Indian students  seeking admission to foreign universities. Its services include career counselling, university  selection, application processing, documentation support, and visa guidance. 

The firm contended that it acted primarily as a service provider to Indian students and, in some  cases, as a facilitator for foreign universities. Tax authorities classified these services as  “intermediary services”, making them taxable under GST in India. 

Aggrieved by GST demands raised against it, KC Overseas Education approached the Supreme  Court, challenging the classification and seeking exemption by claiming that its services  amounted to export of services. 

ISSUES INVOLVED

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1. Whether services provided by overseas education consultants constitute “intermediary  services” under the CGST/IGST framework. 

2. Whether such services can be treated as export of services, thereby exempt from GST. 

3. Whether GST is applicable when the ultimate beneficiary (foreign university) is  located outside India. 

PETITIONER’S ARGUMENTS 

The petitioner, KC Overseas Education, contended that it provides independent and  comprehensive consultancy services to Indian students aspiring for higher education abroad. It  was argued that the nature of services offered such as career counselling, guidance on university  selection, assistance with applications, documentation, and visa procedures, goes far beyond  mere facilitation or brokerage. The petitioner emphasised that its role involves the application  of professional expertise and individualized advice, and therefore cannot be narrowly classified  as that of an intermediary. 

Further, the petitioner submitted that since the foreign universities with whom it coordinates  are located outside India, the services rendered have a cross-border character and should  qualify as export of services under the IGST Act. It was argued that the benefit of such services  ultimately accrues to institutions situated abroad, and thus taxing these services in India defeats  the objective of encouraging international education-related services. The petitioner also  asserted that subjecting such services to GST would result in an additional financial burden on  students and could amount to double taxation, thereby discouraging overseas educational  opportunities. 

RESPONDENT’S ARGUMENTS 

The respondent, Union of India, argued that overseas education consultants clearly fall within  the statutory definition of “intermediaries” under the GST framework. It was contended that  such consultants act as a connecting link between Indian students and foreign universities by  facilitating admissions, coordinating documentation, and ensuring communication between the  two parties. This facilitative role, according to the respondent, squarely attracts GST liability.

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The respondent further submitted that the place of supply of these services is India, as the  services are performed within India and the immediate recipient is the Indian student.  Emphasising that GST is a destination-based consumption tax, the Union of India argued that  the location of the foreign university is irrelevant for determining tax liability. It was also  asserted that intermediary services are expressly excluded from the definition of export of  services under the IGST Act, and therefore, no exemption from GST can be claimed. 

JUDGMENT 

The Supreme Court, having heard learned counsel for the parties and upon a careful  consideration of the statutory scheme of the Central Goods and Services Tax Act, 2017 and the  Integrated Goods and Services Tax Act, 2017, proceeded to determine the true nature of the  services rendered by the petitioner. The Court reiterated that for the levy of GST, the real  substance of the transaction must prevail over its form or description. 

The Court noted that the petitioner, KC Overseas Education, is engaged in facilitating  admissions of Indian students to foreign educational institutions by providing services such as  counselling, application processing, coordination with universities, and assistance in  completing admission formalities. Such activities, in the considered opinion of the Court,  clearly constitute facilitation between two parties and therefore fall within the statutory  definition of an “intermediary” under the GST framework. 

The Bench further held that the place of supply of the impugned services is India, as the services  are rendered within the territorial limits of India and the immediate recipient of such services  is the Indian student. The Court observed that GST is a destination-based consumption tax, and  accordingly, the situs of consumption assumes primacy over the location of the foreign  educational institutions. 

Dealing with the contention that the services amounted to export of services, the Court held  that intermediary services are specifically excluded from the scope of export of services under  the IGST Act. Merely because the petitioner interacts with institutions situated outside India  does not ipso facto convert the transaction into an export of services. The legislative intent, the  Court observed, is unambiguous in this regard. 

The Court also addressed the submission that levy of GST would impose an additional financial  burden on students seeking overseas education. While acknowledging the concern, the Bench 

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held that matters of taxation policy lie within the exclusive legislative domain, and courts  cannot interfere on grounds of economic hardship when the levy is otherwise lawful. 

In view of the above, the Court found no merit in the writ petition. The levy of GST on overseas  education consultancy services was held to be valid and in accordance with law. The writ  petition was accordingly dismissed, with no order as to costs. 

RATIO DECIDENDI 

The Supreme Court held that the true nature of services rendered by overseas education  consultants must be determined on the basis of their functional role rather than the labels  assigned by the service provider. Where the consultant facilitates and arranges interactions  between Indian students and foreign educational institutions for the purpose of securing  admissions, such activity squarely falls within the statutory definition of an “intermediary  service” under the GST framework. 

The Court laid down that in matters concerning the levy of GST, the place of supply and  consumption of the service is decisive. Since the services are rendered within India and the  immediate recipient of such services is the Indian student, the place of supply is India. The  foreign location of universities does not alter the taxable event when the service is consumed  domestically. 

It was further held that intermediary services are expressly excluded from the ambit of “export  of services” under the Integrated Goods and Services Tax Act, 2017. Consequently, the mere  involvement of a foreign entity or institution does not entitle the service provider to claim  exemption from GST on the ground of export. 

The Court emphasised that GST being a destination-based consumption tax, the focus remains  on where the service is consumed and not on where the ultimate benefit may indirectly accrue.  Therefore, services facilitating foreign education, when consumed by Indian students in India,  are liable to GST. 

Lastly, the Court clarified that economic hardship or policy considerations, including the  potential financial burden on students, cannot override a clear statutory mandate. Once a  service is found to be taxable within the framework of the GST law, courts cannot grant  exemptions on equitable or policy grounds.

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ANALYSIS 

This judgment marks a significant development in the interpretation of the GST framework as  applied to education-related services in India. By conclusively classifying overseas education  consultancy services as taxable intermediary services, the Supreme Court has addressed a long standing ambiguity that affected not only education consultants but also other service providers  engaged in cross-border facilitation. The ruling reinforces legal certainty and uniformity in  GST enforcement, which is one of the core objectives behind the introduction of the GST  regime. 

A key contribution of this judgment lies in its reaffirmation of the destination-based nature of  GST. The Court’s emphasis on the place of consumption, rather than the location of the foreign  institution, aligns with the fundamental design of GST as a consumption tax. By holding that  services rendered to Indian students are consumed within India, the Court avoided an overly  expansive interpretation of “export of services” that could have led to tax leakage and  inconsistent application of the law. 

The judgment also adopts a strict and functional interpretation of the term “intermediary”,  focusing on the actual role performed by the service provider. This approach discourages  artificial structuring of transactions to claim tax exemptions and ensures that the substance over-form principle is upheld. The Court’s reasoning makes it clear that merely providing  value-added or professional services does not automatically exclude an entity from being  classified as an intermediary if facilitation remains the dominant function. 

From a regulatory standpoint, the decision strengthens the accountability and compliance  framework under GST. Before this ruling, divergent interpretations by tax authorities and  courts had resulted in uncertainty and litigation. By providing a clear judicial interpretation,  the Court has reduced the scope for arbitrary classification and has enabled more predictable  tax administration for both businesses and regulators. 

However, the ruling has also attracted criticism for its potential economic impact on students  aspiring to pursue education abroad. Since GST liability may ultimately be passed on to  students in the form of higher consultancy fees, concerns have been raised regarding  affordability and access to overseas education. While acknowledging this concern, the Court  correctly maintained that considerations of social or economic policy lie within the legislative  domain and cannot override an explicit statutory mandate.

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The judgment further has broader implications beyond the education sector, particularly for  entities involved in international facilitation, brokerage, and coordination services. By  reiterating that intermediary services are excluded from export exemptions, the Court has set a  precedent that may affect sectors such as tourism facilitation, recruitment agencies, and cross 

border consultancy services, thereby influencing future GST litigation. 

Overall, the decision reflects a judicially restrained yet doctrinally sound approach, balancing  legal certainty with constitutional limits on judicial intervention in fiscal matters. While the  ruling imposes stricter tax obligations, it ultimately strengthens the coherence and integrity of  India’s GST framework, leaving policy reform, if any, to legislative wisdom rather than judicial  discretion. 

FINAL DECISION 

The Supreme Court conclusively held that overseas education consultancy services rendered  to Indian students fall squarely within the ambit of taxable services under the GST regime.  Upon a combined reading of the Central Goods and Services Tax Act, 2017 and the Integrated  Goods and Services Tax Act, 2017, the Court found that such services satisfy all statutory  ingredients necessary to attract GST liability. 

The Court categorically ruled that education consultants facilitating admissions to foreign  universities perform the role of intermediaries, as they act as a link between two identifiable  parties, Indian students and foreign educational institutions. The Court emphasized that the  dominant purpose of the transaction is facilitation and coordination, irrespective of the level of  expertise or professional input involved. Accordingly, the services rendered cannot be  recharacterized merely as independent consultancy to escape taxation. 

Addressing the question of export of services, the Court held that intermediary services are  expressly excluded from the statutory definition of export under the IGST Act. The presence  of a foreign entity or institution as one of the parties to the transaction does not automatically  confer the status of export when the service provider operates within India and the service is  consumed domestically. The petitioner’s claim for exemption on this ground was therefore  rejected. 

The Court further affirmed that the place of supply of such services is India, since the  immediate recipient and consumer of the service is the Indian student. Reiterating the 

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destination-based character of GST, the Court clarified that taxation is determined by the place  of consumption and not by the location of the institution ultimately benefited by the service.  Hence, the levy of GST within India was held to be legally sound. 

On the issue of alleged financial burden on students, the Court observed that while such  concerns may be genuine, they pertain to policy considerations beyond the scope of judicial  review. The Court reiterated that fiscal policy and tax exemptions fall within the exclusive  competence of the legislature, and courts cannot carve out exemptions on equitable or  humanitarian grounds when the statutory mandate is clear. 

The Bench also noted that allowing exemptions in such cases would undermine the uniformity  and integrity of the GST framework, potentially leading to inconsistent classifications and  revenue leakage. The Court underscored that certainty in tax law is essential for both taxpayers  and tax authorities, and judicial interpretation must support, rather than dilute, legislative  intent. 

In light of the above reasoning, the Supreme Court of India upheld the validity of the GST  demands raised against the petitioner. The writ petition was dismissed in its entirety, and the  Court held that GST authorities are legally justified in levying and collecting tax on overseas  education consultancy services rendered in India. 

Held: Services provided by overseas education consultants facilitating foreign admissions to  Indian students are taxable under GST, being intermediary services consumed within India.