2016 (12) TMI 1067

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....provides rates for freight of various airlines to the cargo companies, who decide the airlines through which the cargo is to be transported. For booking the cargo, the appellant receives commission at the rate of 5% as per Indian Air Transport Association (IATA) rates. The rate of commission fixed by IATA is the same for all airlines. In addition to the IATA commission received by the appellant, they also receive "target discount/ target incentive", which is to be paid to them by the airlines for achieving the specified targets. The airlines charged freight to the appellant which in turn is charged by the appellant to its customers. In addition to the same, the appellant recovers charges from its customers on which service tax has been duly....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ion received by the appellant from the airlines is towards any services rendered by the appellants to them. The argument of the appellant is mainly buttressed by the decision of the Hon'ble Madras High Court in the case Airlines Agents Association Vs. Union of India (supra). The undisputed facts in the case are that the appellant booked the cargo by various airlines, who in turn pay commission to the appellant as a percentage of the total freight business booked by the appellant with the airlines. Since the decision substantively hinges on the Madras High Court decision, it is necessary to examine the facts and decision of the said case. Before the Madras High Court, IATA has challenged for declaring as void the provisions of Section 65....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s and not to the airlines. Placing themselves in a situation similar to that of the airline agents, they have claimed that the service rendered by them is only to their customers and not to airlines. Accordingly, their claim is that no service tax is liable to be paid on the commission received by them from the airlines. 7. We find it difficult to accept this argument. We find that the appellant, for booking the cargo belonging to other cargo companies are recovering service charges from them on which they are already discharging service tax under Business Support Service. In addition, it is not disputed that they received commission from the airlines. The commission paid by the airlines to the appellant can only be for the promotion of ....