Call Centre Services Provided to Foreign Client Qualify as Export: CESTAT

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh Bench, has held that call centre services provided to overseas client, British Airways UK, qualify as export of services, thereby entitling the company to claim rebate of service tax paid. The tribunal dismissed the appeal filed by the Revenue and upheld the order of the Commissioner (Appeals). The bench of S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that the recipient of the service is the person at whose instance and expense the service is provided, regardless of who ultimately benefits from it. In the present case, the contractual arrangement clearly showed that the services were provided to British Airways UK, which also paid the consideration. BA Call Centre India Pvt. Ltd., based in Gurugram, provides call centre support services to British Airways, United Kingdom, under a Master Services Agreement dated November 20, 2007. The company handled customer service operations for passengers in the Asia-Pacific region, including India, Dubai, Sydney and Singapore, and received payment from the UK entity on a cost-plus basis in foreign exchange. For the period April 2008 to January 2009, the company exported its services entirely to the UK entity and paid service tax accordingly. It later sought rebate of the service tax under Rule 5 of the Export of Service Rules, 2005 read with Notification No. 11/2005-ST. However, the Department rejected the rebate claim, arguing that the services were performed in India and therefore did not satisfy the condition that services must be “used outside India” to qualify as export. The authorities relied on earlier judicial precedents and held that the destination of consumption ended in India. The department contended that the impugned order allowing the rebate was legally unsustainable. According to the Department, Rule 3(2) of the Export of Service Rules requires two conditions for a service to qualify as export the service must be provided from India and used outside India, and the payment must be received in convertible foreign exchange. The Department argued that the call centre services were partly consumed in India and therefore did not satisfy the requirement that the services be used outside India. BA Call Centre India submitted that the issue had already been settled in its favour in earlier tribunal decisions concerning different periods of the same agreement. It argued that the recipient of the service was British Airways UK, which paid the consideration and benefited from the services. The company further relied on CBEC circulars clarifying that the phrase “used outside India” should be interpreted based on the place where the service is effectively used and enjoyed. Since the operational benefit of the call centre services accrued to the overseas client, the services qualified as export. The tribunal noted that the dispute centred on whether the services rendered to the UK entity qualified as export under the Export of Service Rules, 2005. It observed that earlier decisions of the tribunal in the respondent’s own case had already held similar services to be export of services, and the Department had neither challenged those decisions nor obtained a stay. Since the services were provided from India, the payment was received in foreign exchange, and the benefit accrued to the overseas client, the tribunal concluded that the conditions for export of services were satisfied. Finding no infirmity in the order of the Commissioner (Appeals), the CESTAT upheld the decision granting rebate to BA Call Centre India Pvt. Ltd. and dismissed the Revenue’s appeal. Case Details Case Title: Commissioner of Service Tax, Delhi-IV Versus M/s BA Call Centre India Pvt. Ltd. Citation: JURISHOUR-282-CES-2026(CHAN) Case No.: Service Tax Appeal No. 60568 of 2016 Date: 09.03.2026 Counsel For Appellant: Narinder Singh, Authorized Representative Counsel For Respondent: Priyanshi Chakraborty, Advocate Click Here To Read Order Read More: Lapses by Fino Payments Bank | DGGI Highlights Due Diligence Failures, Shell Entity Onboarding and Alleged Rs. 3,000 Crore Transaction Routing

Call Centre Services Provided to Foreign Client Qualify as Export: CESTAT

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