Hi Tour Mamallapuram Private Limited Vs Commissioner of GST & Central Excise (CESTAT Chennai)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai allowed the appeal filed by a tour operator against service tax demands relating to air ticket and train ticket booking charges. The Department had alleged that during April 2013 to March 2014, the appellant booked air tickets for customers and paid service tax on a value lower than the invoice value. A show cause notice was issued demanding differential service tax, interest, and penalty under Section 76 of the Finance Act, 1994. The Adjudicating Authority confirmed the demand and penalty, and the Commissioner (Appeals) upheld the order.
Before the Tribunal, the appellant argued that there is a separate taxable category for “Air Travel Agent” service and that mere booking of air tickets could not be taxed as “Tour Operator” service. It was submitted that the appellant obtained tickets from air travel agents at discounted prices and sold them to customers at original prices, retaining the discount to meet administrative expenses. According to the appellant, this activity amounted to trading, which was outside the scope of service tax.
The appellant also relied on earlier Tribunal decisions passed in its own case for previous periods. The Tribunal noted that in prior orders, it had already held that mere trading in air tickets without additional tour-related activities did not attract service tax under “Tour Operator” service. It was also noted that the appellant was not a member or agent of IATA and that the Revenue had not alleged receipt of commission from airlines or IATA. The Tribunal observed that the definition of “Tour Operator” service involved a range of activities and there was nothing to show that mere trading in air tickets by itself attracted service tax.
