Tribunal upholds service tax on commission from Amadeus India but sets aside tax on others

The Tribunal upheld the demand for service tax under Business Auxiliary services for the commission received from M/s. Amadeus India Pvt. Ltd. However, it set aside the demand for service tax on the commission received from other IATA agents. The appeal was partly allowed based on these findings.

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Issues:
1. Whether the commission received from M/s. Amadeus India Pvt. Ltd. is chargeable to Service Tax under Business Auxiliary services.
2. Whether the commission received from International Air Tickets Association (IATA) agents is liable to Service Tax under Business Auxiliary services.

Analysis:

Issue 1: Commission from M/s. Amadeus India Pvt. Ltd.
The appellant, engaged in International Air Ticket Booking services, received commission from M/s. Amadeus India Pvt. Ltd. The Revenue contended that this commission is chargeable to Service Tax under Business Auxiliary services as it was seen as promoting the business of M/s. Amadeus India Pvt. Ltd. The appellant argued that their use of Central Reservation Systems (CRS) software provided by M/s. Amadeus was for self-use and did not involve promoting M/s. Amadeus' business. The Tribunal, citing a previous decision, upheld the demand of service tax under Business Auxiliary services for the commission received from M/s. Amadeus.

Issue 2: Commission from IATA Agents
The appellant also received commission from IATA agents on booking air tickets for clients. The Revenue claimed that this commission, shared between the principal IATA agent and the appellant, was for providing marketing support and thus liable to service tax under Business Auxiliary services. The appellant argued that as they operated on a principal-to-principal basis with IATA agents and the service tax was already paid by the principal IATA agent, no further tax was due. The Tribunal, considering the nature of services provided and previous decisions, concluded that the commission received from other IATA agents was not liable to service tax under Business Auxiliary services, setting aside the demand.

In summary, the Tribunal upheld the demand of service tax under Business Auxiliary services for the commission received from M/s. Amadeus India Pvt. Ltd. However, it set aside the demand for service tax on the commission received from other IATA agents. The appeal was partly allowed based on these findings.

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