TaxTMI 
TaxTMI 
2017 (8) TMI 220
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....vice of booking air travel tickets. They are registered with the service tax department and paying service tax on commission received from the Airlines under Business Auxiliary Services. On verification of ST-3 returns and comparison with the IATA statements, it was noticed that appellants have not paid service tax on the entire commission received from airlines for the sale of air tickets. According to department the appellant can sell the ticket on the listed price in the ticket and have to pay to Airlines only the Net-Net fare fixed by Airlines. The difference between Listed Fare and the Net-Net fare is retained by appellant as commission. Appellants received commission from the Airlines on the basis of Listed price irrespective of the p....
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....ehalf of the appellant, Shri R. Raghavan, the learned counsel, argued that the confirmation of service tax has been made on wrong appreciation of facts. That the show cause notice itself in based on incorrect facts. That appellant has not received any commission from the airlines as alleged in the show cause notice. The appellant has discharged the service tax liability as per the TDS (income tax) deductions made by the Airlines on the commission. He explained that the show cause notice proceeds on the pretext that there is a basic fare/Listed price for every ticket and that when the ticket is sold for any amount lesser than this basic fare, the difference is received by appellant as commission. That, in fact, appellant does not and has not....
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....fication of the accounts of appellant it would be evident that appellant has not received any amount as supplementary commission as alleged by department. That the demand has been confirmed without such verification of accounts/records pertaining to the issue and therefore requested that the matter may be remanded. 5. The Learned AR, Shri. K.P. Muraleedharan reiterated the findings in the impugned order. He explained the standard and supplementary commission referring to the example quoted in the order in original. In the first page of BSP IATA agent statement, the sum total of standard and supplementary commission is shown as commission . That irrespective of the price for which the air ticket is sold by appellant, this amount is the actu....
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....ed from the Customer Rs. 13,500. On behalf of the appellant the Learned Counsel has explained that such basic fare is not the price at which the ticket is sold to the customer and that appellant has not received any amount in the manner of supplementary Commission. The worksheet produced by the appellant also shows that the appellant has not received any such supplementary commission. However, this aspect has to be verified with the accounts/records of appellant before entering into a conclusion. For this, the matter requires to be remanded. 8. Section 67 of the Finance Act, 1994 provides that value of taxable services includes the commission received by air travel agent from the airline, and does not include the airfare collected by air t....
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.... therefore, being pointed out that, in any case, the appellant cannot be liable for service tax in excess of 5% of the total margin realized. During the hearing of the case, it was pointed out that the Revenue authorities were in error in treating the printed fare on the tickets as basic fare and demanding only service tax at 0.5% of that amounts. It is also being emphasized that the option to pay at 0.5% of the basic fare cannot be converted into a burden on the appellant, of paying service tax at an amount higher than his total margin. 3. I have perused the records and heard learned DR also. 4. The appellant is right in his contention that his margin from the sale of ticket alone can constitute his agency commission and a tax is to be l....