TSI Yatra Pvt. Ltd. Vs Commissioner of Central Goods & Service Tax (CESTAT Chandigarh)
CESTAT Chandigarh held that the Air Travel Agents are not required to pay Service Tax on the Commission received by them from CDS/CRS companies. Also held that Air Travel Agents need not include the commission on fuel surcharge in the basic fare for payment of Service Tax.
Facts- The appellants are engaged in the business of booking of air tickets for various domestic and international airlines. Department contested that the appellants were required to pay Service Tax on the incentives extended by CRS/GDS companies, during April 2007 to March 2014, under Business Auxiliary Service’ and for the period after March 2014 as an ‘intermediary’ between customers and CRS companies. Department also contested that the appellants were required to pay Service Tax on the gross value of commission (base fare + fuel surcharge) as per Rule 6(7) of the Service Tax Rules, 1994, during the period from April 2008 to March 2012.
Conclusion- Held that the issue stands settled in their favour by the larger Bench of Tribunal in the case of Kafila Hospitality & Travels Pvt Ltd 2021 (47) GSTL 140 (Tri.-LB), which overruled the decisions relied upon by the impugned order. We find that larger Bench has gone in to the issue and held that the Air Travel Agents are not required to pay Service Tax on the Commission received by them from CDS/CRS companies. The larger Bench has gone in to the issue in great detail and held that the air travel agent is promoting its own business and is not promoting the business of the airlines or of the CRS Companies; a passenger cannot be deemed to be an audience for the promotion of the business of CRS Companies the incentives paid for achieving the targets are not leviable to service tax.
