Holiday vouchers

[kamaljit singh]

We are in the business of sale of holiday vouchers to corporate clients.

These vouchers are used by them as freebees to incentivize sale of products to end customer. Like you buy a samsung refrigrator and you get two night hotel accomodation on a choice of over 40 locations

We entertain and book rooms for all the customers who apply for accomdation within the stipulated time.

We have been paying service tax under category of tour operator but now the service tax department is putting us in the category of business auxillary services are they correct or if no help me with a logic.

Though this is not a mandatory service for running business of the corporate clients. Sometimes they use holiday vouchers, physical gift  or extended warranty or scratch cards to incentivize the sales

 

 

AI Summary

Business Challenges Reclassification of Holiday Voucher Service Tax from Tour Operator to Business Auxiliary Services A business involved in selling holiday vouchers to corporate clients is questioning the appropriate service tax category. These vouchers are used as incentives for product sales, such as offering hotel accommodations with a purchase. Previously taxed under the tour operator category, the service tax department now classifies them under business auxiliary services. The business seeks clarification on whether this reclassification is correct, noting that these incentives are not mandatory for the corporate clients' operations. A respondent in the forum opines that the business should not be liable for service tax.