Out-bound tour activities and service tax: pre-deposit waived and recovery stayed pending appeal.

Out-bound tour activities were treated, at least prima facie, as falling outside service tax on tour operator services, where the activities predominantly involved coordination with foreign agencies. A contemporaneous Board circular supported the view that out-bound tours were not within the tax net, and service tax had already been paid on airfares under air travel services. Relying on these factors and a similar stay order in an identical matter, CESTAT granted waiver of pre-deposit and stayed recovery of the impugned demand until disposal of the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery in respect of the demand treating out-bound tour activities as taxable tour operator services.

Analysis: The appellant's activities were found, at least prima facie, to relate predominantly to out-bound tours involving coordination with foreign agencies. The contemporaneous Board circular treated out-bound tours as outside the purview of service tax, and the appellant had already paid service tax on the airfares under air travel services. In view of these factors and the existence of a similar stay order in an identical matter, the demand was not required to be pre-deposited at that stage.

Conclusion: The appellant was granted waiver of pre-deposit and recovery of the impugned demand was stayed till disposal of the appeal.

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