TaxTMI 
TaxTMI 
2024 (7) TMI 1402
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....ived charges from them. The Department was of the view that, appellant is liable to pay service tax on the amounts received for outbound tours under 'Tour Operator Service'. It was also noted that, appellant has to pay service tax on the charges received from M/s. Amadeus India Limited under 'Business Auxiliary Services'. Show cause notice dated 07.10.2008 was issued for the period 10.09.2004 to 31.12.2007 proposing to demand service tax under Tour Operator Service for the period 01.07.2003 to 31.03.2008. 3. Another show cause notice dated 28.08.2009 was issued for the period 01.04.2008 to 31.03.2009 proposing to demand service tax under Business Auxiliary Services. After due process of law, the original authority vide common order dated 29.01.2010 confirmed the demand, interest raised in the show cause notices and also imposed penalties. Aggrieved by such order, the appellant has filed the above appeals. 4. The Ld. Counsel Ms. Radhika Chandrasekhar, appeared and argued for the appellant. It is submitted that the appellant conducts outbound tours. These package tours (outbound tours) are arrangement for tours outside India. The appellant has divisions which include tour divis....
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....atever name called, covered by a permit other than carriage permit, granted under the Motor Vehicles Act, 1988 (59 of 1988) or the Rules made there under:- Explanation: For the purposes of this clause, the expression tour does not include a journey organized or arranged for use by an educational body, other than a commercial training or coaching centre, imparting skill or knowledge or lessons on any subject or field". 9. It is submitted that Section 65 (113) of the Finance Act. Defines 'tour' as under:- "Tour means a journey from one place to another irrespective of the distance between such places". The taxable service of tour operator given under Section 65 (105) (n) reads as under: "to any person, by a tour operator in relation to a tour". 10. As per the above definition, in the case of outbound tours, even though planning, scheduling takes place in India, the entire activity of tour having been provided outside India and consumed outside India, the outbound tours cannot be subject to levy of service tax within India. This aspect was also clarified by various Circulars/Trade Notices issued by various Commissionerates which are detaile....
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....r, if the tour operator is providing services solely of arranging or booking accommodation for any person in relation to a tour. (iii) Services, other than services specified in (i) and (ii) above, provided or to be provided to any person, by a tour operator in relation to a tour. The bill issued for this purpose indicates that it is inclusive of charges for such a tour. (a) The invoice, bill or challan issued indicates that it is towards charges for such accommodation, and (b) this exemption shall not apply in such cases where the invoice, bill or challan issued by the tour operator, in relation to a tour, only includes the service charges for arranging or booking accommodation for any person and does not include the cost of such accommodation. The bill issued indicates that the amount charged in the bill is the gross amount charged for such a tour. 25 10 40 [Notification No. 38/2007-S.T., dated 23-8-2007] 1/2006-S.T. Effective rate of Service tax for specified services - Percentage of abatements In exercise of the powers conferred by sub-section (1) of section 93 of....
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....ith Hajj and Umrah pilgrimage. It is clarified that as the tour takes place outside India it shall be treated as a service performed outside India. It is clarified by the board that the services provided in respect of tour undertaken for carrying out Hajj and Umrah pilgrimage in Saudi Arabia by Indian pilgrims would not be subject to levy of service tax. 11. The Export of Service Rules 2005 (Notification No.9/2005-ST dated 03.03.2005) was also referred to by the Ld. Counsel. Rule 3 provides as under:- Export of taxable service. - 3 (1) The export of taxable service shall in relation to taxable services:- (i) specified in sub-clauses (d), 24[(m)], (p), (q), (v), (zzq), (zzza), (zzzb), (zzzc), '[(zzzh), (zzzr), (zzzy), 3[(zzzz), (zzzza) 3b, (zzzzm), (zzzzu) (zzzzv) and (zzzzw)]]] of clause (105) of section 65 of the Act, be provision of such services as are provided in relation to an immovable property situated outside India; (ii) specified in sub-clauses (a), (f), (h), (i), (j), (1), (n) (o), (w), (z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv), (zw), (zz), (zza), (zzc), (zzd), (zzf), (zzg), (zzi), (zzl), (zzm), (zzo),....
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....Tribunal at Mumbai while hearing an appeal filed by M/s. Cox & Kings Limited, Mumbai expressed doubts on the decision rendered by the Division Bench of the Principal Bench of the Tribunal at New Delhi in the case of M/s. Cox & Kings Limited 2014 (35) S.T.R. 817 (Tribunal-Delhi). The matter was placed before the Larger Bench. As per Interim Order No.104/2023 dated 19.10.2023 the Larger Bench answered the reference in para 49 as below:- (i) The taxability of activity undertaken by the appellant will have to be decided on the facts peculiar to the case and in accordance with intent of Section 65, Section 66 and section 67 of the Finance Act; (ii) The dispute in this appeal i.e. from 01.04.2005 to 31.03.2011 pertaining to the period prior to the negative list regime does not have to consider taxable territory as affecting the decision thereof. 16. The Ld. Counsel pointed out that in para 47 the larger bench observed that the earlier decision in M/s. Cox & Kings 2014 (35) S.T.R. 817 (Tri.-Del.) had not determined the issue on given sets of facts and that the Division Bench is to decide the case without placing reliance on the interpretation in the case of earlier de....
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....n India. The Tribunal set aside the demand on outbound tours. The Ld. Counsel prayed that the demand in respect of outbound tours for the period 10.09.2004 to 31.12.2007 therefore, cannot sustain and prayed that the same may be set aside. It is submitted that from 2008 onwards the appellant is discharging service tax on outbound tours also. 19. The second issue is with regard to the demand of service tax under Business Auxiliary Service for the period from 01.07.2003 to 31.03.2008 and from 01.04.2008 to 31.03.2009. It is submitted that the demand is raised on the incentives received by the appellant from M/s. Amadeus India Pvt. Limited for booking air tickets using their software. It is submitted that the appellant does not provide any service to Amadeus. They merely use the software/hardware to book air tickets for which the appellant is given loyalty incentive by Amadeus. It is not a consideration which can be subject to levy of service tax. The activity of booking air ticket is covered under air travel agent services and there is no further activity carried out by the appellant to classify the same under Business Auxiliary Services. The decision of the Larger Bench of the Tri....
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.... is emphasized by the Ld. AR that the planning, scheduling, organizing of the tour takes place within India. So also, arrangement of tickets are made in India. The customers pay to the appellant in Indian currency. Although the tour happens outside India, since part of the activities happen within India, the activity is subject to levy of service tax under Tour Operator Service as defined under Section 65 (115) of the Finance Act 1994. The Commissioner has discussed in para 6 of the impugned order with regard to the contention put forward by the appellant that outbound tours happen in foreign country and therefore, not subject to levy of service tax. The Trade Notices issued by various Commissionerates, and Circulars have been referred to in this paragraph. Since the planning of foreign tours as per the requirement of the customer is an essential ingredient of tour which happens within India, it cannot be said that outbound tours are not subject to levy within India. It is too farfetched argument to submit that the tour begins in foreign country and ends in foreign country and therefore, not subject to levy of service tax. Since the planning and scheduling and organizing happens in....
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....ccording to the customer is paid for a tour outside India. This means, the consumption of service is happening outside India. 29. The Larger Bench in the case of M/s. Cox & Kings Limited, vide Interim Order No.104/2023, dated 19.10.2023 has observed that the decision has to be made without relying on the earlier decision in M/s. Cox & Kings. In para 48, the doubts put forward by the Mumbai Bench while referring the matter to the Larger Bench was noted. The said para 48 has already been reproduced. Prior to the negative regime, there was no requirement for determining taxable territory on levy of tax, as long as both service recipient and service provider is within India, such services are taxable. It was decided by the Larger Bench that the taxability has to be looked into on the facts of each case. In the present case, the entire tour has happened outside India. When the word 'tour' is defined in the Act, the said meaning has to be applied to interpret tour operators service also. 30. The Division Bench of the Tribunal, in the case of M/s Weldon Tours & Travels Pvt. Ltd. had occasion to consider the demand of service tax raised on outbound tours for the period prior to 01.07....
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....he addition of service tax charged, is equivalent to the consideration; (iii) in a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determined in the prescribed manner." (emphasis supplied) 75. Section 67 of the Act deals with valuation of taxable services for charging service tax. Sub-section (1) of Section 67 provides that where service tax is chargeable on any taxable service with reference to its value, then such value shall, where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by the service provider. It is, therefore, clear that only such amount is subject to service tax which represents consideration for provision of service and any other amount which is not a consideration for provision of service cannot be subjected to service tax. 76. In this connection, it would be appropriate to refer to the decision of the Supreme Court in Union of India v. Intercontinental Consultancy and Technocrats [2018 (10) G.S.T.L. 401 (S.C.)]. The Supreme Court observed that service tax is on the "va....