Air travel agent

[Guest]

Dear Sir, Please mention the options available to charge Service tax and in what circumstances in case of Air travel agent and also Rail travel agent , pls give us any references regarding this .thanks and regards

[Rajagopalan Ranganathan]

Sir,

Air Travel Agent Service: - Service Tax is payable on 40% of the amount charged. Cenvat credit of input services is allowable but no cenvat credit of inputs and capital goods is available vide Sl. No. 5 of Notification No. 26/2012-ST dated 20.6.2012.

However, transport of passenger with or without belongings, by air, embarking or terminating in an airport located in the State of Arunachal Pradesh, Assam, Maipur, Meghalaya, Mizoram, Nagalan, Sikkim or Tripura or at Baghdogra located in West Bengal are exempt vide Sl. No. 23 (a) of Notification No. 25/2012-ST dated 20.6.2012 effective from 1.7.2012.

Rail Travel Agent Service: - Service tax is payable on transport of passengers by rail only in case of first class or an air conditioned coach with effect from 1.10.2012. Service tax is payable on 30% of the value in case of transport of rail rail passengers, with or without accompanied belongings. There is no restriction on availment of Cenvat credit vide sl. No. 3 of Notification No. 26/2012-ST dated 20.6.2012 with effect from 1.7.2012.

AI Summary

Service Tax Guidelines: Air Travel Agents Pay on 40%, Rail Agents on 30% for First-Class/AC, Cenvat Credit Rules Apply. An air travel agent inquired about the options for charging service tax for air and rail travel services. A respondent clarified that for air travel agents, service tax is payable on 40% of the charged amount, with Cenvat credit allowed for input services but not for inputs and capital goods. Certain regions are exempt from this tax. For rail travel agents, service tax applies to first-class or air-conditioned coach travel, payable on 30% of the value, with no restrictions on Cenvat credit. These guidelines are based on specific notifications effective from mid-2012.