Airbnb India's Marketing and Promotional Services to Airbnb Ireland Qualify as Export, Not Intermediary Services: CESTAT [Read Order]

The Chandigarh Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the marketing and promotional services provided by Airbnb India Pvt. Ltd. to its parent company Airbnb Ireland qualify as export of services and do not fall under the category of intermediary services, even when there is some level of customer interaction.

Airbnb India, the appellant, entered into a Master Service Agreement with Airbnb Ireland to provide business development and marketing support services. For the period April to June 2017, the appellant filed a refund claim of Rs. 3.25 crore for unutilized CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004.

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The refund was rejected by the adjudicating authority on the grounds that the services were intermediary in nature and hence did not qualify as export. The Commissioner (Appeals) upheld this view, prompting the appellant to approach the Tribunal.

The appellant’s counsel argued that the company was providing services on a principal-to-principal basis and that its role was limited to marketing and promotional activities. It had no authority to negotiate prices, accept bookings, or conclude contracts on behalf of Airbnb Ireland.

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The appellant’s counsel relied on several judgments, including Genpact India Pvt. Ltd., Verizon Communications India Pvt. Ltd., and Blackrock Services India Pvt. Ltd., to support its claim that it was providing services on its own account. The counsel also referred to CBIC Circular No. 230/24/2024-GST dated September 10, 2024, which clarified that advertising and marketing services to a foreign client do not amount to intermediary services under GST, drawing a parallel with the services provided by Airbnb India.

The two-member bench comprising Judicial Member S. S. Garg and Technical Member P. Anjani Kumar observed that the agreement clearly established an independent contractor relationship between Airbnb India and Airbnb Ireland, with no agency or tripartite relationship. The tribunal explained that the mere fact of following client guidelines or subcontracting work did not change the nature of the service into that of an intermediary.

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The tribunal also observed that in subsequent financial years 2020–21 and 2021–22, similar refunds had been granted by the department under GST, and those orders had not been challenged. The tribunal held that estoppel does not strictly apply to taxation matters, but the department’s inconsistent stance without initiating recovery proceedings under Section 73 of the Finance Act was not justified.

The tribunal ruled that the services provided by Airbnb India amounted to the export of services, and the refund claim was valid.

To Read the full text of the Order CLICK HERE

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