Oct 112018

Whether Intermediary Services can be exported under GST

Meaning of intermediary services Section – [Section 2(13) of IGST act]:

Intermediary means a broker, an agent or any other person, by whatever name called,

  • who arranges or facilitates the supply of goods or services or both, or
  • securities, between two or more persons, but
    • does not include a person who supplies such goods or services or both or securities on his own account

Thus, the definition of intermediary is wide enough to include broker as well as agent. The only requirement is that its scope is limited to facilitation of trade.


Now the question arises that the services provided by an intermediary located in India to a non resident outside India is export of services or intra-state supply or inter-state supply?


  • Point of supply in case intermediary services [section 13]:

Section 13(8) – The place of supply of the following services shall be the location of the supplier of services, namely:––

(a) …….

(b) intermediary services;

(c) …….

Thus, in respect of intermediary services place of supply is the location of supplier. Since the place of supply and location of supplier both are in India and hence services by intermediary services are not export of services within the meaning of section 2(6) of IGST act.

Advance ruling [Global Reach Education Services Pvt. Ltd]:

In the given case the applicant was promoting the foreign university and was helping them in enrolling Indian students. In providing the promotional services, the promotional company was charging commission/fee from the foreign university. Citing the above section in this case AAR decided that in the given case intermediary services are not export of services.

  • Whether intermediary services are inter-state supply:

In the given case location of supplier and place of supply both are in the same state and hence it becomes an intra-state supply.

Whether the intermediary services provided by a banking company to its offshore account holders be treated as an intra-State supply or an inter-State supply for payment of GST?

With the same logic such services are also not export of services.


  • Benefit of section 16 (export being zero rated) is not available to such intermediary and all services are taxable at full rate.
  • However, with the same logic import of this services is outside the preview of GST and not GST is payable on it. Means all exports are taxable and all imports are tax free.
  • This, essence is encouraging import and discouraging export.