Tour Operator Services

[Ethirajan Parthasarathy]

When a tourist approaches a tour operator, the tour operator approaches another tour operator who raises a bill in the name of the first tour operator charging service tax after abatement.  The first tour operator raises a bill on the tourist for higher amount. In my opinion the first tour operator has to again charge service tax which is not eligible for any input credit.

Some times the First tour operator raises a bill for the tour for the like amount raised by the second tour operator & reflects certain amount as 'service charges'.  In this circumstances also, the total amount will be subject to service tax without any input. Kindly confirm whether my understanding is correct

[Naveen Jain]

MR. ethirajan parthasarathy,

 

Your understanding is correct.

And Operator 1 (raised bill on operator 2) or Operator 2( raised bill on tourist), who raised bill with abated service tax not eligible for input credit.

 

 

AI Summary

Service tax on inter operator supplies: abated billing by supplier does not permit input credit and tax applies on tourist charge. When a tour operator re-bills a tourist for services procured from another operator who billed with abatement, the re-billing operator must charge service tax on the full amount charged to the tourist; the abatement used by the supplying operator does not entitle the receiving operator to an input credit, and amounts labeled as service charges remain fully taxable.