CESTAT Chandigarh rules services to foreign universities are exports, quashes tax demand on Auscan Consultants

February 04, 2026 : The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh, has set aside service tax demands along with interest and penalties against M/s Auscan Consultants India Ltd and its Managing Director, holding that services provided to overseas educational institutions qualify as export of services and cannot be treated as intermediary services.

The appeals arose from a common order dated 28 August 2019 passed by the Commissioner (Appeals), CGST, Chandigarh, which had confirmed service tax demand for the period 2012–13 to 2015–16, along with interest and penalties, including a penalty of ₹50,000 on the Managing Director. The Tribunal bench comprised Customs, Excise and Service Tax Appellate Tribunal, Chandigarh, with S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member).

According to the record, Auscan Consultants India Ltd was engaged in providing promotional and facilitation services to foreign colleges and universities. Under agreements with overseas institutions, the company assisted students seeking admission abroad and received commission from the foreign universities upon successful enrolment.

The Department had alleged that the appellant was providing “intermediary services” under Rule 2(f) of the Place of Provision of Services Rules, 2012, read with Rule 9, and therefore the place of provision of service was in India. A show cause notice dated 2 June 2017 was issued on this basis, which culminated in confirmation of demand by the adjudicating authority and its affirmation by the Commissioner (Appeals).

Before the Tribunal, the appellant argued that the issue was no longer res integra and had been consistently decided in favour of assessees by several benches of the Tribunal. It was contended that the appellant was providing business promotion and support services to foreign universities on its own account and was remunerated by commission, which did not fit the definition of an intermediary.

Accepting these submissions, the Tribunal noted that the central question was whether services rendered to foreign universities for commission were intermediary services or export of services. It observed that multiple Tribunal decisions had already settled the issue, holding that such services amount to export of services.

The bench reiterated that an intermediary is one who arranges or facilitates the main service between two or more persons. In the present case, the appellant was providing services directly to foreign clients who paid commission and did not arrange or facilitate the main service of education rendered by the colleges. The services were in the nature of promoting the business of overseas institutions.

The Tribunal further held that since the services were provided to clients located outside India and consideration was received in foreign exchange, they satisfied the conditions of export of services. Following the settled position of law, the Tribunal found the impugned order unsustainable and set it aside in entirety. As the demand failed on merits, it did not examine issues relating to limitation or penalties. Both appeals were allowed with consequential relief as per law.

Cause Title: M/s Auscan Consultants India Ltd versus Commissioner of Central Excise and Service Tax, Chandigarh-I
Case No.: Service Tax Appeal No. 61091 of 2019
Coram: S. S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member)