This is a key announcement from the Union Budget 2026–27, which aims to simplify the tariff structure, support domestic manufacturing, promote export competitiveness, and correct duty inversions to provide further impetus to domestic manufacturing and enhance export competitiveness.
GST-related proposals
Under GST, the Union Budget has introduced enabling provisions to support the reforms announced by the Hon’ble Prime Minister under GST 2.0 in September 2025. Without these provisions, the September 2025 recommendations remained incomplete. The key proposals are as follows.
Background on the taxability of intermediary services
The existing provisions determine the place of supply (POS) of intermediary services as the location of the supplier. Accordingly, when an Indian intermediary provides services to a foreign recipient, the POS is considered to be in India, making the supply liable to GST. This is why Indian agencies invoicing commissions for student referrals were required to levy 18 per cent Indian GST, collect it from their clients (universities), and remit it to the tax authorities. As a result, Indian education agents were treated as “intermediaries” rather than “exporters earning foreign remittances”.
There have been numerous queries and challenges from education agents, ranging from departmental appeals to court proceedings. One of the earliest rulings was an adverse advance ruling in the case of Global Reach Education Services Pvt Ltd. This ruling became a reference point not only for education agency operations but for the wider outsourced services sector in India. The 2018 ruling, which declared these services as “not export”, is published on the GST Council website.
Role of AAERI
The role of AAERI has been significant. As early as 2018, AAERI undertook a lobbying role and made representations to the Ministry of Finance, highlighting that Indian education agents were being paid in foreign exchange and that their clients were located outside Indian tax jurisdiction. On this basis, GST, being a destination-based client tax, should not have been levied on the sector. AAERI engaged Deloitte to support its case, and while the Ministry of Finance engaged with the AAERI executive team and accepted submissions, no definitive solution emerged.
AAERI also reached out to universities to explain that non-payment of Indian GST could be interpreted as non-compliance with Indian legal requirements and therefore act as a barrier to trade. Most Australian universities agreed, allowing Indian education agents to invoice with the added GST component. In the absence of a similar representative body in the UK or Canada, universities in those destinations were not approached and continued to disregard Indian regulatory requirements.
AAERI was represented in discussions with the Ministry of Finance by Mr Rahul Gandhi, Mr Harinder Johar and Mr Ravi Lochan Singh. Other senior executives, including Mr Nishi Borra and Mr Balaji, continued engagement with Australian universities.
Developments since September 2025
In September 2025, the GST Council recommended amendments to the POS definition. At the time, I shared a post on my social media channels, including photos from an AAERI visit in 2019.
In the same month, AAERI President Nishi Borra issued an advisory to members clarifying that the recommendation would apply only after formal notification and would operate prospectively. This clarification, based on advice from PwC experts, was considered essential.
What is changing and why it matters
It has now been proposed to omit the relevant provisions, which would result in the general POS rules applying to intermediary services as well. Under this framework, the POS would be the location of the recipient. Consequently, services provided by an Indian intermediary to a foreign recipient may be treated as an export of services, subject to compliance with other conditions.
An advisory issued by EY further clarifies that these changes will apply prospectively, from the next financial year beginning in April 2026.
Additional context
Over the past year, several education agents have pursued tax matters through Indian courts, with favourable outcomes in some cases. Notably, Krishna Consultants (KC) and Global Opportunities received positive rulings. IDP also achieved a favourable outcome, although its case related more specifically to subsidiary remittances. Despite these decisions, the tax department continued issuing notices and conducting searches across India. While agents may ultimately obtain relief through the courts, the process is time-consuming and costly. Some agents also relocated operations to Special Economic Zones (SEZs) to access export-related benefits.
Following these tax changes, the position is now considerably clearer. Indian education agents will no longer invoice commissions with added Indian GST, and Australian universities will avoid an additional cost that was not recognised as GST under Australian tax rules. It is reasonable to view this as a prospective change that delivers benefits across the sector.
I would like to acknowledge Mr Rahul Gandhi, Mr Nishi Borra and Mr Balaji, who have in this lengthy lobbying effort over several years. While peak bodies across multiple trade sectors have made submissions, AAERI also made sustained efforts. The outcome is now evident.
Ravi Lochan Singh is the CEO of Global Reach, a leading Education Agent across South Asia.
