Visa Facilitation Services Provided Directly To Travellers Not Taxable Under Service Tax As BAS: CESTAT

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal has held that visa facilitation services rendered directly to individuals travelling abroad are not liable to service tax under the category of “Business Auxiliary Service” under the Finance Act, 1994. The coram comprising Ajayan T.V. (Judicial Member) and M. Ajit Kumar (Technical Member) observed that the appellant was merely facilitating procurement of visas for intending travellers and was directly interacting with passengers seeking visas for travel to Saudi Arabia. The bench passed the ruling while allowing appeals filed by Arafaath Travels Pvt. Ltd. against orders confirming service tax demand, interest, and penalties on amounts collected towards visa and documentation charges for obtaining Saudi Arabian visas. The Department had alleged that the assessee was acting on behalf of travellers and enabling them to obtain visas through authorised agents of the Saudi Arabian Embassy in Mumbai, thereby rendering taxable “Commission Agent” services falling under “Business Auxiliary Service” as defined under Section 65(19) of the Finance Act, 1994. Based on audit findings, a show cause notice dated 11 January 2013 was issued invoking the extended period of limitation and demanding service tax of Rs.13.04 lakh for the period 2008-09 to 2011-12. A subsequent statement of demand sought an additional Rs.1.92 lakh for April 2012 to June 2012. Buy Now: Service Tax Judgements E-Compilation – April 2026 The adjudicating authority had confirmed the demand along with interest and imposed equivalent penalties under Sections 78, 76 and 77 of the Finance Act. The Commissioner (Appeals) upheld the tax demand while deleting penalties imposed under Section 77, following which the assessee approached the Tribunal. Before the Tribunal, the assessee argued that CBEC Circular No. 137/6/2011-ST dated 20 April 2011 had specifically clarified that visa facilitators providing visa assistance directly to individuals are outside the scope of taxable Business Auxiliary Service. The appellant contended that it was not acting on behalf of any embassy and was only assisting passengers for a fee. It also relied upon Notification No. 22/97-ST dated 26 June 1997 which limited taxable value for air travel agents to airline commission even where related services like visa procurement were provided. The Revenue, however, argued that the exemption in the CBEC circular applied only where services were rendered directly to individuals and not where visa processing was carried out through authorised embassy agents. According to the Department, the appellant functioned as an intermediary and therefore the services remained taxable. Rejecting the Department’s stand, the Tribunal noted that the appellant was directly interacting with intending travellers while facilitating procurement of visas and therefore fell squarely within the clarification issued by the CBEC. The Bench extensively relied upon earlier Tribunal rulings including Green Channel Travel Services Pvt. Ltd. v. CST and Globe Forex & Travels Ltd. v. CCE which had consistently held that visa facilitation services provided directly to individuals are not taxable under Business Auxiliary Service. The Tribunal reproduced the CBEC circular clarifying that visa facilitators merely assist individuals in completing immigration formalities and collect statutory charges such as visa fees, attestation charges and emigration fees for remittance to concerned authorities while charging their own service fees separately. The circular categorically stated that such services do not fall within any taxable category under Section 65(105) of the Finance Act, 1994. The Bench further observed that Revenue authorities cannot argue contrary to binding departmental circulars. Reliance was placed on the Supreme Court judgment in Union of India v. Arviva Industries (I) Ltd. and the recent Supreme Court decision in Vijay Krishnaswami @ Krishnaswamy Vijaykumar v. Deputy Director, Income Tax (Investigation). On limitation also, the Tribunal ruled in favour of the assessee. It held that the Department was already aware of the appellant’s activities through previous show cause notices, audits and correspondence on record. Therefore, there was no suppression or mala fide intention warranting invocation of the extended period of limitation. The Tribunal set aside the impugned orders and allowed the appeals with consequential relief. Case Details Case Title: M/s. Arafaath Travels Pvt. Ltd. Versus Commissioner of GST & Central Excise Citation: JURISHOUR-1130-CES-2026(CHE) Case No.: Service Tax Appeal Nos.42008 & 42009 of 2016 Date: 05.05.2026 Counsel For Appellant: R. Viswanathan, Chartered Accountant Counsel For Respondent: Anandalakshmi Ganeshram, Authorized Representative Click Here To Read Order Read More: One-to-One Correlation for Jewellery Discounts is “Impractical”: CESTAT Allows Titan’s Excise Duty Appeal

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