TaxTMI 
TaxTMI 
2024 (7) TMI 1402
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.... 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 division, ticketing division, foreign exchange divi....
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....ermit, 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 detailed below:- (a) Trade Notice issued by Delhi Commissionerate in Trade Notice No.71- CE (Service....
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....(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 the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service of the description speci....
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....grimage 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), (zzt), (zzv), (zzw), (zzx), (zzy), (zzzd), (zzze), (zzzf), (zzzzg), (zzzzh), (zzzzi), (zzzzk), (zzzzl) and (zzzzo) of clause (105) of section 65 of the Act, be provision of such services as are performed outside India:] Provided that where such taxable service is partly performed outside Indi....
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....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 decision in M/s. Cox & Kings (2014). 17. In para 48 the discussion with regard to the issue of taxable territory after 01.07.2012 has been discussed. The relevant paragraph at 47 and 48 of the Larger Bench decision in M/s. Cox & Kings dated 19.10.2023 is reproduced as under:- 47. The earlier decision in Cox & Kings had not det....
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.... 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 Tribunal in the case of Khafila Hospitality and Travels Pvt Ltd versus CST (2021) 47 GSTL 140 (Tri.LB) has decided the issue whether air travel agent who uses the online portal of CRS companies to book air tickets is liable to pay service tax on the incentives received. The Tribunal held that the incentives received cannot be subject to levy of servi....
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....der 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 India, the levy and demand of service tax is legal and proper. 23. With regard to the demand under Business Auxiliary Services, the findings in the impugned order was reiterated. 24. It is submitted that the non-payment of service tax would not have come to light, but for the audit conducted by the officers of the department. The appellant had not in....
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....y 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 01.07.2012. After considering the observations made by the Hon'ble Apex Court, in the case of All India Federation of Tax Practitioners (supra) and also the decision of the Larger Bench dated 19.10.2023. It was observed that since the tour is happening outside India, the charges received for operating and arranging outbound tours is not subject to levy and collection of service tax. The ....
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....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 "value of taxable services" and, therefore, it is the value of the services which are actually rendered which has to be ascertained for the purpose of calculating the service tax. It is for this reason that the expression "such" occurring in Section 67 of the Act assumes importance. The Supreme Court, therefore, observed that the authority has to find what is the gross amount charged for providing "such" taxable services and so any other amount which ....