OIDAR Taxability and CRS Booking Support: data access incidental to ticket facilitation was not taxable service.

Services provided by Computer Reservation System companies were examined against the definition of online information and database access or retrieval service under the Finance Act, 1994. The analysis found that the taxable entry applies only where the provider actually supplies electronic data or information to the recipient. On the facts described, the CRS arrangement primarily facilitated ticket bookings, expanded reach, and enabled access to the airline's own booking data for travel agents, with consideration linked to successful bookings. Because the data involved was generated from the airline's systems and not independently supplied by the CRS companies, the service was treated as infrastructure and booking facilitation rather than taxable OIDAR, and service tax on that basis was not sustainable.

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Issues: Whether the services provided by Computer Reservation System companies to the airline were taxable under the category of online information and database access or retrieval services on a reverse charge basis.

Analysis: The definition of online information and database access or retrieval under section 65(75) of the Finance Act, 1994 requires providing data or information in electronic form through a computer network, and the taxable entry under section 65(105)(zh) applies only where such service is actually provided to the recipient. The contractual arrangement showed that the CRS companies were engaged to facilitate ticket bookings, expand reach, and enable real-time access to the airline's own data for travel agents, with consideration linked to successful bookings. The data relied upon by the department was data generated from the airline and its booking system, not information independently supplied by the CRS companies. The prior decisions holding that ownership of data is relevant were preferred, while the contrary line of decisions was not accepted.

Conclusion: The CRS companies did not render taxable OIDAR service to the airline, and the levy of service tax on that basis was not sustainable.

Ratio Decidendi: OIDAR service is taxable only when the service provider supplies data or information that is not already available with and owned by the recipient; where the arrangement is in substance for use of infrastructure and facilitation of bookings, and any data access is merely incidental, the levy does not apply.

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