SERVICE TAX ON OUTSOURCING OF AIR TICKETS

[DEEPAK GUPTA]

Dear Sir,

We are IATA BSP agent  and  we are dealing in air ticketing and depositing the service tax monthly basis recovered from agents/customers  and adjusted the same with service tax payable on commission received from Air Lines. We are also doing outsourcing  of Air tickets from IATA BSP agents and they are recovering service tax from us on Std. Commission+PLB/ discounts given to us . Sir My  querry is :- Should I show this commission amount (Received from outsource Agent ) in service tax return or not,  whereas the tax is already recovedred by IATA BSP Outsource agent from me  in his billing.

The specimen of the invoice issued by the IATA BSP outsource agent to my Company is given below.

IATA BSP AGENT BILLING TO MY COMP.              SAME INVOICE FROM MY   COMP.  TO OTHER CO.

Supose Basic fare &Taxes                 10000            Suppose Basic fare &Taxes            10000                               

Less Std. Commn+PLB/Dis. (-)           1000            Less Std. Commn+PLB/Dis. (-)          900

                                                         9000                                                                  9100

Add Service Tax on Rs. 1000               124            Add Service Tax on Rs. 700/-              84

                                                                                    ON STD. COMMN. ONLY

 Net amount I have to pay to              9124             Net amount I have to Receive         9184         

 IATA BSP Outsource Agent                                   From customer   

Whether we can take cenvat credit on outsourcing or not and how can we adjust the same . Also I am not depositing Rupees 84/-  because I have already paid Rs. 124/- to IATA BSP Outsource Agent.

Jatinder Sharma

[Ravi Chopra]

A careful reading your query it seems that, it need detailed analysis and scrutiny since it involves various issues, levy of service tax, valuation, availability of cenvat credit etc. 

AI Summary

Service tax on outsourced ticketing: whether commission declared and cenvat credit claimed when tax recovered by intermediary. Whether service tax must be declared on commission and PLB/discount received from an outsourcing IATA BSP agent when that agent has recovered service tax in its invoice, and whether Cenvat Credit is available to the recipient for tax paid by the outsourcing agent along with the proper mechanism to adjust or offset such credit in returns and payments.