Broad interpretation of package tour exemption covers allied tour services and supports higher abatement entitlement.

Services comprising local transportation, joy rides, monument entry, guide fees and allied tour services were held to fall within the broader exemption entry for services provided by a tour operator in relation to a package tour. The expression "in relation to" was treated as having wide amplitude, and the explanation to the notification was read as covering transportation, accommodation, food, guide services, monument entry and similar services connected with the tour without requiring every component to be supplied by one operator in every case. On that basis, the assessee qualified for the higher abatement, and the demand and consequential penalty were not sustainable.

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Issues: Whether services consisting of local transportation, joy rides, entry to monuments, guide fees and allied tour services fall within the expression "services provided by a tour operator in relation to a package tour" under Sl. No. 2(n)(i) of Notification No. 01/2006-ST dated 01 March, 2006 as amended, so as to entitle the assessee to 75% abatement rather than the lesser abatement under Sl. No. 2(n)(iii).

Analysis: The exemption notification used the expression "in relation to", which is of wide amplitude. The Explanation to the entry defined "package tour" to include transportation, accommodation, food, tourist guide, entry to monuments and other similar services in relation to the tour, but it did not require every listed service to be provided by one operator in every case. Services that are part of or connected with the package tour remain covered by the broader entry. The reasoning also drew support from the settled understanding that "in relation to" expands the scope of the subject matter and from the view that services rendered in aid of a tour are covered by such expression.

Conclusion: The assessee's services were covered by Sl. No. 2(n)(i) and the assessee was entitled to 75% abatement. The demand and consequential penalty were not sustainable.

Ratio Decidendi: The expression "in relation to" in an exemption entry covering a package tour is of broad import and includes services forming part of or connected with the tour even if not all illustrative components of the package are provided.

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