A meeting was held on 22.11.2007 with representatives of various tour operators and Association of Domestic Tour Operators of India to discuss the various issues relating to tour operator services in general and ‚outbound tourism in particular. 

During the discussion, all aspects of outbound tourism services provided by the tour operators were discussed extensively.  The Commissioner of Service Tax, Delhi clarified that consequent upon the change in definition of the Tour Operator w.e.f. 10.09.2004, the services provided by a tour operator located in India to a recipient, who is also located in India, for planning, scheduling and organizing in relation to a organisation of tour outside India (outbound tourism) are taxable under the category of tour operator service. This view is based on the fact that the service provider and the service receiver, both, are located in India and the service flows within the country. 

It was pointed out to the trade that they are not paying service tax on such services. They should immediately start paying tax on such services as well pay tax for the past period.  It was agreed upon by the trade that the service tax is leviable on outbound tourism and they assured to discharge their tax liability accordingly.

The queries of the trade were also answered related to outbound/inbound and domestic tour operations. Commissionerate of Service Tax, New Delhi

Tour operator service tax: outbound tour planning by India-based provider to India-based recipient deemed taxable, with past liabilities. Change in the definition of Tour Operator effective 10.09.2004 renders services provided by an India based tour operator to a recipient also located in India for planning, scheduling and organizing tours outside India taxable as tour operator service; taxability is premised on both provider and recipient being located in India and the service flowing within the country, and operators were directed to pay current and past service tax liabilities.