TaxTMI 
TaxTMI 
2024 (5) TMI 371
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....harges, service charges on Eurail Passess issued, profit from hotel booking within India, profit from international package & hotel booking and commission received from various parties. They also submitted their balance sheet for the Year 2007-08, ST-3 returns for the period 2004-05, 2005-06, 2008-09 along with the details of income received under various heads during the said years. Copy of agreement made with M/s. Galileo India Pvt. Ltd./InterGlobe Technology Quotient Pvt. Ltd. (hereinafter referred as GIPL/ITQPL) were also provided. From those documents department observed that the appellant is issuing air tickets of various airlines (domestic as well as international by booking segments (air tickets) on Computerized Reservation System (CRS) of M/s. GIPL/ITQPL) and are paying service tax on the amount of basic fare under the service category "Air Travel Agent's Services". Appellant were also receiving incentive from GIPL/ITQPL. The department observed that appellant was not paying service tax on the following: (i) On domestic tours and outbound tours; (ii) On the commission received from overseas hotels for providing customers to them. The said commission was received by the....
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....ce Tax amounting Rs. 7,18,348/- (Rs. Seven Lakhs Eighteen Thousand Three Hundred Forty Eight Only), as detailed in Annexure "A", on the value of taxable service should be demanded and recovered from them under proviso to the Section 73(1) of the Finance Act, 1994 as amended, read with Section 66 and Section 68 of the Act, ibid and Rule 6 of Service Tax Rules, 1994. 3. The said amount was proposed to be recovered along with Education Cess amounting to Rs.14,025/- and Rs.4,078/- towards Secondary and Higher Education Cess along with the proportionate interest at the total amount and the appropriate penalties were also proposed to be imposed upon the appellant. The said proposal has been confirmed vide Order-in-Original No. 47/2010 dated 26.08.2010 except that a demand of Rs.11,180/- was dropped. The appeal against the said order has been rejected vide Order-inService Appeal No. 200/2012 dated 06.09.2012. Being aggrieved, the appellant is before this Tribunal. 4. We have heard Shri Prabhat Kumar and Shri Karan Kanwal, learned Advocates for the appellant and Ms. Jaya Kumari, Authorized Representative for the department. 5. Learned counsel for the appellant has mentioned that the dem....
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....he show cause notice. Appellant is merely purchasing such passes from other Indian tour operators and is reselling them to the tourists. The commission earned on such resale cannot be the subject matter of service tax leviability. 5.3 With respect to the activity of sale/purchase of foreign exchange by the appellant, it is mentioned that same has wrongly been held taxable as Banking and Financial Service. The appellant is arranging the hotel accommodation and is booking air tickets, the payments are being made either in Indian rupee which is got converted in foreign exchange under authorization from the individual passenger through the Reserve Bank of India who appointed foreign exchange brokers for the amount to be passed in foreign currency to the agents in overseas countries. Otherwise also, in some cases of individual customer approaching the appellant, later is receiving foreign exchange under travel quota scheme which is later passed on to overseas agents as cost towards hotel accommodation in their country. Same is also done by RBI Licensed foreign exchange broker as per the entitlement of individual passenger under travel quota scheme of RBI. Since the appellant himself is....
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....The amended definition introduces the service as that of planning, scheduling, organizing or arranging tours, arrangements for accommodation, sightseeing or other similar services to be called as Tour Operator's Service. Hence, tour itself was no more a taxable event but all the aforesaid activities related to arrangement of a tour are covered under the said definition. Hence the service tax liability of Rs.6,54,828/- has rightly been confirmed. It is submitted that the decision of this Tribunal in the case of Cox & Kings (India) Ltd. (supra) is no more applicable being set aside by the Larger Bench of this Tribunal, in the light of Interim Order No. 104/2023 passed on 19.10.2023 qua the reference by the Division Bench of Tribunal at Mumbai after taking a contradictory opinion as was taken in the case of Cox & Kings (India) Ltd. (supra). 6.1 Learned Departmental Representative further impressed upon that the income from the sale and purchase of foreign exchange is an activity of Banking and other Financial services which is liable to tax. Confirmation of service tax amounting to Rs.2,037/- is affirmed. Similarly there is no infirmity when the service tax on the incentives received....
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....' has wrongly been confirmed. The same is hereby set aside. 7.2 Service Tax with respect to Tour Operator's Service 7.2.1 To adjudicate the liability of appellant for allegedly rendering Tour Operator's Service we need to know the meaning of domestic, inbound as well as outbound tours. The same are as follows: (i) In inbound tours, tours are arranged within India for foreign tourists. The tour would commence, be wholly performed and terminate in India, but for the foreign tourist. Service Tax, unless exempted was remitted for this category of service provided. (ii) In outbound tours, assesses organize tours outside the territory of India, for Indian tourists. In this category, the tour is performed entirely outside India, to facilitate Indian tourists visit various locales, in territories outside India. 7.2.2 Foremost we also need to look into the definition of tour operator as given under Section 65 (44) of the Finance Act, 1994 (hereinafter referred as the Act). We observe that definition has undergone various amendments since 01.09.1997 to 16.05.2008. The same are as follows: "(1) 1-9-1997 to 6-10-1998: (44) "Tour Operator" means a person who holds a tourist permit ....
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....e observations are: "33. When an interpretation clause uses the word "includes", it is prima facie extensive. When it uses the word "mean and include", it will afford an exhaustive explanation to the meaning which for the purposes of the Act must invariably be attached to the word or expression. (See G.P. Singh's Principles of Statutory Interpretation, 10th Edn., pp. 173 and 175.)" 7.2.4 Section 65 (113) of the Act defines "tour' to mean a journey from one place to another irrespective of distances between such places. Section 64 (105) (n) enumerates the taxable service as any service provided or to be provided to a person by a tour operator in relation to tour provision continues unamended since its inception in 1997. Thus it is clear that the definition provides that a tour Operator would include any person engaged in the business of operating tours in the tourist vehicle covered by a permit granted under Motor Vehicles Act or rules made there under in addition to a person engaged in the business of planning, scheduling, organizing or arranging tours by any mode of transport. The appellant herein is admittedly organizing/arranging tours by making arrangements for accommod....
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....ibunal, referring to the above Board Circular ruled that services provided beyond the Indian territorial waters will not attract Service Tax which is a destination based consumption tax which is a destination based consumption tax. 7.2.7 As already observed about Section 65(105)(n) of the Act and in view of the statutory definition of "tour", considered in the context of the legal position demarcating the limits of the application and reach of provisions of the Act, it is clear that a journey from one place to another beyond the territorial limits of India, even if amounting to an activity comprised within the ambit of the definition of "tour operator", would not amount to a taxable service under the provisions of the Act. On the aforesaid analysis we conclude that the consideration received for operating and arranging outbound tours, even if falling within the scope of the amended definition of "tour operator"; (provided by the assessees and consumed by their tourist customers beyond Indian territory), is not liable to levy and collection of Service Tax, under provisions of the Act. 7.2.8 This issue is otherwise no more res integra as stands decided by the Larger Bench of this T....
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....the foreign currency sale rate and reimburses the same to the appellant. To our opinion, this activity is not covered under the taxable activity of 'Banking and Financial services'. Otherwise also, the appellant is merely earning a small amount of profit in arranging foreign exchange for the travelers. In another clarification, CBEC vide Master Circular issued under Circular No. 96/7/2007-S.T., dated 23-8-2007 (F.No. 354/28/2007- TRU) had clarified that any sale or purchase of foreign currency would not come within the ambit of Foreign Exchange Broking under 'Banking and Financial Services' a defined under Section 66(12) of the Act. That entry 'Banking and other Financial Services' under the amended Finance Act, 2008 in no way covers the said transaction of the appellant. The only entry could be under (a) (iv), (vii) or under (b) of Section 66(12) of the Act. However, the appellant states that they are not having any license for brokerage in foreign exchange and they are not carrying out any such activity. Therefore, neither under (a) (iv) or under (a) (ix) or under (b), there is a case for bringing the impugned transaction under the category of Banking and other Financial Serv....