Tour operator service does not cover mere employee transport by contract carriage absent tourist vehicle use or tour planning.

Transportation of employees in contract carriages was not taxable as tour operator service. For the period before 10-09-2004, the levy applied only where a tourist vehicle was used, and the vehicles in question were not shown to satisfy the statutory requirements under the Motor Vehicles law and rules, so the demand could not stand. For the period after the amended definition, tax coverage extended to planning, scheduling, organizing or arranging tours, but the appellant merely provided vehicles on fixed contractual terms for employee transport, without independent tour planning or arranging. The Board circular did not extend the levy to such a pure transport arrangement, so the demand was unsustainable for both periods.

---

---

Issues: Whether transportation of employees in contract carriages, which were not tourist vehicles, was taxable as tour operator service for the period prior to 10-09-2004 and for the period after the amended definition of tour operator service.

Analysis: For the pre-10-09-2004 period, tour operator service applied only where the operator used a tourist vehicle. A tourist vehicle had to answer the definition under Section 2(43) of the Motor Vehicles Act, 1988 and conform to Rule 128 of the Central Motor Vehicles Rules, 1989. The vehicles used by the appellant were not shown to satisfy those requirements, so the levy could not be sustained for that period. For the post-10-09-2004 period, the amended definition extended the levy to planning, scheduling, organizing, or arranging tours, including package tours, but the appellant only supplied vehicles on fixed contractual terms for employee transportation. There was no material to show independent planning or scheduling of tours by the appellant, and the vehicles also continued not to be tourist vehicles. The circular issued by the Board did not extend the levy to such a pure transport arrangement.

Conclusion: The activity did not fall within tour operator service for either period, and the demand was unsustainable.

Ratio Decidendi: Tour operator service requires either use of a tourist vehicle conforming to the statutory motor vehicle requirements or, under the expanded definition, independent planning or arranging of tours; a mere contract carriage arrangement for employee transportation is not taxable on that basis.

---