Travel agent

[CA AJAY KUMAR AGRAWAL]

Mr A is running a Travel Agency. He books Railway Tickets online & makes payment through his Saving A/c. He collects cash (mostly) & cheques (in few cases) from clients & deposits in his saving account. He maintains no accounts / issues no invoices etc. Consider the value of tickets booked during year is more than ₹ 10 Lacs. My question is :- 1. Whether he needs to get registered under Service Tax? 2. If yes, then in which category (accounting head)? 3. If Service Tax to be paid, on which value of ticket booked & at what rates? Kindly share your views.

[JSW CEMENTLIMITED]

He shall be liable to pay service tax on value received except for railway fare. He shall be registered as Rail travel agent.

[CA AJAY KUMAR AGRAWAL]

Thank you sir. It means he has to deduct Railway Fare from his total receipts. Practically it is difficult as he maintains no bills / details.

In continuance of the same Mr A also books Air tickets indirectly. He is sub agent of a travel agent Mr B. Mr A keeps advance deposited with Mr B and if required by client he books ticket on the portal of Mr B. In turn Mr B pays him the commission (after TDS). Yearly commission amount being approx ₹ 25000/- In this case also:- 1. Is he required to take Service Tax Reg & if yes in which category/ accounting head? 2. At what rates Service Tax to be paid if any? Kindly share your valuable opinions.

[JSW CEMENTLIMITED]

He will be covered by exemption limit of ₹ 10 lacs. He need not get registered.

[CA AJAY KUMAR AGRAWAL]

Please share your views on the same, including abatement schemes (if any) in details.

AI Summary

Service tax liability on travel agency receipts: taxable on agency amounts excluding railway fare, registration depends on threshold. A travel agent is liable to service tax on amounts received for agency services, excluding the actual railway fare, and should be registered as a rail travel agent; commission received as a sub agent for air bookings constitutes the taxable income for registration/payment analysis, though agents with receipts below the statutory exemption threshold are not required to register. Practical compliance issues arise when no books or invoices are maintained, and abatement scheme details were requested but not provided.