2026-VIL-1596-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax – Place of provision of services under Place of Provision of Service Rules 2012, Classification of intermediary services – Appellant engaged City One Tourism and Travel LLC, Dubai to provide visa processing services for its Dubai visa application website. Appellant hired the foreign service provider to assist in visa issuance procedures. Appellant's clients were all located outside India whereas the service provider was situated in Dubai. Revenue demanded service tax alleging place of provision of service was India as per Rule 3 of POPS Rules since recipient of service was in India – Whether services provided by a foreign service provider to assist in visa processing constitute intermediary services under Rule 9 of POPS Rules, 2012 – HELD – An intermediary service requires a tripartite arrangement where one party facilitates provision of service by the second to the third party. The agreement in the present case was only between the foreign service provider and the appellant and the Government of Dubai was not a party to the agreement - The foreign service provider assisted the appellant in carrying out its work with the Government of Dubai. The agreement specifically forbade both parties from assigning work to any third party without prior consent. Such arrangement does not constitute a tripartite agreement and the services provided were not intermediary services. Therefore Rule 3 of POPS Rules applies and the place of provision of service is the location of the recipient of service that is India - The appellant is liable to pay service tax on the services received from the foreign service provider under RCM - Service tax shall only be charged on service charges paid to the foreign service provider and not on visa fees paid to the foreign Government through the service provider - Sufficient grounds existed to invoke the extended period of limitation as the appellant did not disclose details of services received from the foreign service provider and the facts came to light only during audit - Service tax imposition on visa fee amounts is set aside. Matter is remanded to the original authority for re-computation of service tax on service charges only with consequential adjustments to interest and penalty - The appeal is partly allowed
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