TaxTMI 
TaxTMI 
2023 (11) TMI 16
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....s, is that part of the air fare on which the commission is normally paid by the airlines. 2. The appellant contends that since the volume of sale of tickets and collection of payments from number travel agents worldwide is a difficult task, all the airlines place the stock of their tickets with IATA through the Global Distribution System linked with IATA platform. IATA sells the tickets to its member travel agents, collects payment from them, makes payment to the airlines and issues a fortnightly statement titled as "Billing Settlement Plan BSP to its members specifying the following details:- (a) Cost of tickets purchased; (b) Charges levied by the airlines; (c) Fuel surcharge charged to cover price fluctuation of Aviation Turbine Fuel; (d) Rate of commission paid by the airlines and the amount on which commission is paid; (e) Amount payable to the airlines, after adjusting advance, if any; and (f) Balance advance. 3. The appellant also contends that the format used by IATA is universally applicable to all the member travel agents and the appellant or the other IATA members similarly placed do not have any say nor any con....
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....2013, the Commissioner confirmed the demand that was proposed and the relevant portions of the order passed by the Commissioner are reproduced below: "15. At the very outset I find that the basic issues involved in the instant case are: Whether denial of option to pay service tax in terms of Rule 6(7) of the Rules, for nonpayment of service tax on gross value including Fuel surcharges on which commission has been pain to the assessee by the Airlines, is justified and if so whether demand of service tax at full applicable rate of service tax on total receipts of commission is sustainable under service tax law. Wrong availment of Cenvat Credit on the input service invoices issued at unregistered premises. xxxxxxxxx 16.5. I find from the records that the information required by the department had not been provided by the assessee. However, during the course of adjudication proceeding they have admitted sample copy of AITA BSP Agent Billing statement for the billing period 16.12.2008 to 31.12.2008 and on these basis has contended that IATA is giving commission on the amount of fare only an no commission has been paid to them on the amount of....
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....er passed by the Commissioner was challenged by the appellant before the Tribunal in Service Tax Appeal No. 59715 of 2014. The Tribunal, by a decision dated 14.10.2014, remanded the matter for a fresh decision with a further direction to the Commissioner to consider the documents produced by the appellant in support of the contention that it had paid service tax on that part of the air fare on which commission is normally paid by the airlines. The relevant portion of the order passed by the Tribunal is reproduced below: "7. xxxxxxxxxxxx. The word, "basic fare" is defined in the sub-rule as the part of the airfare on which the commission is normally paid to the Air Travel Agent by the Airlines. The explanation to Rule 6 (7) defining the term "basic fare" clearly indicates that the basic fare for the purpose of this sub-rule is not the gross fare but is the part of the gross airfare charged from the passengers on which the Airlines normally pay commission to the Air Travel Agent. The expression "air fare on which the commission is normally paid" means the portion of air fare, whether 100% or a lesser percentage, on which most of the Airlines pay the commission ignoring the s....
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....mitation. The relevant findings of the Commissioner recorded in the order dated 30.01.2017 are reproduced below: "4.2 The issue for decision before me is as to whether the fuel charges need to be included in the basic fare or not. ***** 4.5 ***** In context of the above, I observe that it is necessary to ascertain as to whether the assessee received commission on the basic fare which included fuel surcharge. The assesse has submitted copies of the IATA BSP summary statements for the period [months of October 2008, July 2009 and April 2010] as asked to them during the course of personal hearing on 04.01.2017 and it has been contended by them that the periodical commission statement of the IATA shows clearly the amount of fare, the amount of taxes on fare and the commission paid on fare and that it is clear from the said statements that IATA is giving commission on the amount of fare only and nowhere shows that the commissions has been paid to them on the amount of fuel surcharge. ***** 4.8 Now coming to the issue of ascertaining the correct taxable value in terms of the provision under Rule 6(7) of the Rules, I find that....
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.....09 50 2350 146 73 3 12. 1 to 15 90 3605022872 13.07.09 5500 2350 4.29 236 * 13. 1436497 58 3605022886 13.07.09 1265 2350 8.62 109 * -090701 July‟09 14. 58 3605022887 13.07.09 1595 5450 13.29 212 * 15. 90 3605022888 13.07.09 150 2350 50.67 76 * 16. 58 3605022922 14.07.09 315 2350 25.4 80 * 17. 90 9768620536 20.04.10 3870 0 3 116 * 18. 16 to 30 90 9768620537 20.04.10 2020 3200 7.77 157 * 19. 1436494 589 9768620538 20.04.10 1900 1850 5.95 113 * -100402 April‟10 20. 90 9768620559 20.04.10 200 1600 27 54 * 21. 589 9768620560 20.04.10 250....
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....ms and conditions for payment of commission. I therefore find no merits in their arguments that they had discharged their service tax liability correctly in terms of Rule 6(7) of Service Tax Rules, 1994 and reject the same." (emphasis supplied) 11. Ms. Madhumita Singh, learned counsel for the appellant assisted by the Shri Sameer Sood submitted that: (i) The Commissioner, after remand, completely failed to appreciate the issue that was required to be decided; (ii) It was for the department to place on record evidence that some airlines had paid commission on air fare and fuel surcharge but this was not done; (iii) The Commissioner committed an error in assuming, on the basis of an arithmetical calculation, that the commission at a flat rate of 3% was paid on air fare and fuel surcharge by the airlines; (iv) All that was required to be examined by the Commissioner was whether the appellant had paid commission on the air fare alone, or fuel surcharge was also included; (v) The Commissioner failed to appreciate the provision of rule 6(7) of the 1994 Rules; (vi) The BSP statement are followed worldwide uniformly and the ....
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....airlines after examination of the documents produced by the appellant and the observations made by the Tribunal. The Tribunal, in the said order, had observed that the term "basic fare" in terms of the definition of rule 6(7) of the 1994 Rules is not the gross fare including fuel surcharge, but is that part of the gross fare on which the concerned airlines normally pay commission to the air travel agents. The Tribunal, therefore, held that what is relevant for the purpose of rule 6(7) of the 1994 Rules is to determine on which part of the air fare, commission is normally paid by the airlines to the air travel agents. 16. The Commissioner, after remand, proceeded "to ascertain as to whether the assessee had received commission on the basic fare which included fuel surcharge". The Commissioner, therefore, presumed that the basic fare would include fuel surcharge even though the Tribunal in its order dated 14.10.2014, while remanding the matter to the Commissioner, had specifically observed that the term "basic fare", in view of the definition contained in rule 6(7) of the 1994 Rules, is not the gross value including fuel surcharge, but is that part of the gross air fare on which t....