Air travel agent

[Asked by 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 on travel agent services applies to allocated portions of air and rail fares, with specified exemptions and credit limits.
Air travel agent services are taxable on a prescribed portion of charges; cenvat credit for input services is allowed while credit for inputs and capital goods is disallowed, and specified air transport to or from certain northeastern locations and Bagdogra is exempt. Rail travel agent services are taxable for passenger transport limited to first class or air conditioned coaches on a prescribed portion of value, and cenvat credit availment is not restricted under the controlling notification.