Sonu Aggarwal
SERVICE TAX APPLICABILITY ON TOUR OPERATORS
To understand the concept of Tour Operator first of all we have to clear that there is major difference between tour operator and Travel Agent Service. Tour Operator is wide term than Travel Agent.
Difference between Tour Operator Service and Travel Agent Service can be understand easily by following Table
|
Tour Operator Service |
Travel Agent Service |
1. Any Public sector undertaking operating tours. 3. Any person, Firm or Company engaged in the business of tour in a tourist vehicle covered by a permit granted under the Motor Vehicles Act 1988 (59 of 1988).
|
Travel Agent means any person engaged to providing service to customer in relation to booking of passage of travel by road. That Means Except
|
After understanding the difference in our mind following question take place
- What Is “Taxable Service”?
- What is the Definition of “Tour”?
- Who Is “Tour Operator”?
- What Service Tax Applicability on Tour Operator i.e (what should be Rate of Service Tax and how to charge Etc)?
- Is There any exemption for service provided by Tour Operator ?
As Per Section 65 (105) (n) of Finance Act, 1994as amended “Taxable Service” means
1. Any service provided or
2. To be provided to any person, by a tour operator in relation to a tour.
As Per Section 65(113) of Finance Act, 1994 as amended “Tour” means
- A journey from one place to another irrespective of the distance between such places.
As Per Section 65(115) of Finance Act, 1994 as amended “Tour Operator” Means
i. “Tour Operator” means any person, Firm or Company engaged in the business of
- Planning,
- Scheduling,
- organizing or arranging tours like arrangements of accommodation, sight-seeing or other similar services by any mode of transport
ii. Any Public sector undertaking operating tours.
iii. Any person, Firm or Company engaged in the business of tour in a tourist vehicle covered by a permit granted under the Motor Vehicles Act 1988 (59 of 1988).
Service Tax Applicability On Tour Operator
| SR. NO | Description of taxable service | %Abatement | %taxable |
| 1 | Services by a tour operator in relationto,- (i) a package tour Including cost of accommodation, food,transport arrangement, tourist guide, entry to monuments and other similar services.
Condition The bill issued for this purpose indicates that it is inclusive of charges for such a tour. |
75 | 25 |
| 2 | A tour operator is providing services solely of arranging or booking accommodation for any person in relation to a tourCondition
1. The invoice, bill or challan issued indicates that it is towards the charges for such accommodation. 2. 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. |
90 | 10 |
| 3 | (iii) Any services other than specified at (i) and (ii) above. ConditionThe bill issued indicates that the amount charged in the bill is the gross amount charged for such a tour. | 60 | 40 |
General Exemption for All Service Provider as well as Tour Operator.
- Service Provided to United Nation
- Service Provided to International Organization e.g.( World Health Organization , IMF International Labour Organization) etc.
- Service Provided to Officers of any foreign diplomatic mission in India or their family members for official or personal use are exempt.
- Service Provided Outside of India .
- Service Provided to Special Economic Zone i.e (Special Economic zone (SEZ) is a geographical region that is designed to export goods and provide employment)
- Exemption for Small scale service Provider whose value of service does not exceed Rs 10 lakh .(But this exemption is available only if value Of Taxable service in the preceding year does not exceed Rs 10 Lakh that means for exemption of service tax we have to check preceding year value of service provided).
- Service Provided Free Of Cost.
I have enquired multiple tour operators amount for 6pax for 5Night and 6 Days from Gauwahati, kaziranga(1N), shillong,(2N), Gauwahati(2N) and fly
Three tour operation given quote approximatley 14200 per pax from 16april 2017 to 21 april 2017. One operator added extra cost 0f 9% Govt Tax, Second operator added extra cost of 3.5 GovtService Tax. Third one has put no extra cost.
What is actual method to pay Govt TAx. It is GST. What type invoice /bill I should demand as customer.
hi,
I am a travel agent and tour reseller.My supplier is charging service tax 4.35% from me . i am selling package to client with my mark up profit. so do i need to pay service tax again, whats the procedure.pls advice with example.
hi,
please somebody give me the details of % of tax to be aid in local travels firm if income is exceeded by10lks/annually
hi, please tell me services tax rate on educational trip organized by school via tour operators .
kindly tell me . . . services tax exemption on that services.
Sir if service provided to a foreigner from hotels/home stays/restaurants in India and the income is received in foreign currency, and the service is received in India whether service tax is applicable. Please clarify with relevant service tax rules and provisions
hi,
Presently I am paying 14% (flat) against tour operation service tax after abatement value. 60% abatement is applicable in our case. I am paying 14% of 40% value as service tax for tour operation or 5.6% of total amount. Eg. Total invoice value is Rs. 100000/- for that I am paying service tax of 100000 less 60% abatement =40000 * 14% = 5600/- or 5.6% of 100000 = 5600/-
This is the current situation . From 15th November onward 14.5% of after abatement value or 5.628 % of total value is it correct?
similarly ticket booking i am paying 1.4% (flat) of total invoice value. It will changed from 15th November is 1.407 is it correct?
Please clarify my doubts.
Regards/Gopi
i am a travel agent please advice service tax calculation
we are charge to customer
ticket price 5000
commition 400
bank charges 25
we are pay
ticket ptice 5000
bank charges 10+st
please advice urgent basis
Dear Team,
I Would like to know the calculation about Travel Agent Service Tax.
Please help me out.
Regards,
Sanjay Deb
9706155637
Hi,
My client providing transport service to one Pvt Ltd company on a contract basis and this company taking service from my client and provide to other company in this case my client charge service tax
What would be senario if suppose xyz agent is selling hotel to another agent ABC, then ABC to customer. So in this case first service tax will be charged by xyz and then by Abc. However as per act if tour operator claiming abatement then he is not eligible to take credit on input service tax paid by him. As we see practically there has been cascading effect on tax. So please guide me on these issue with relevant act and judgements.
What Should be Service tax implications if
1-I am booking room in my hotel on behalf of tour operator
What Should be Service tax implications if
1-I am booking room in my hotel on behalf of tour operator
2-I am booking room on behalf of foreign tour operator or non resident tour operator.
I have started tour and travel business and taken service tax registration voluntarily i haven’t cross turnover off rupess 9lakh .
shall i stiil need to collect and pay service tax ?
second issue- rate of service tax and any credit if available in respect of service tax already paid at the time of purchase of ticket from agency.
Hi,
Kindly advice to what are the applicable taxes for tour operator / package tour handler. Am I suppose to pay tax while booking the hotels / package @ (TDS + S.TAX+ Education Cess+ Others) and charge it again to my customer?
For e.g
Purchase ABC Hotel:
Hotel Booking 10,000
Car Rental Service 2,000
TDS as applicable (10%) 1,200
Service Tax ????
Edu Cess ????
Total Purchase Amount 13,200 ++++
Sale of Package to XYZ individual:
Hotel Booking 10,000
Car Rental Service 2,000
Commission 1,000
TDS as applicable (10%) 1,300
Service Tax ????
Edu Cess ????
Total Sale Amount 14,300 ++++
I am a tour operator and in a way resale the services to my clients (as per above example, purchased from ABC and sold at % commission to XYZ). Will the same % of taxes be applicable to my company as well as they are applicable to ABC in this case.
Appreciate your detailed response for my better understanding. Thanks in advance.
Best Regards,
Jayesh Jeshrani
The tour operator can follow commission basis method instead of claiming abatement scheme?
Dear Ma’am,
Can we avail cenvat credit on the service tax paid to a tour agent.. Service tax charged @3.09%…
Hello Sonu, Thanks for the blog. I had couple of questions:
Does this blog still hold good, in terms of any new rules or regulations?
Service tax should be paid if the aggregate of taxable service is more than 10lakhs in previous year or aggregate of value of tours sold is more than 10lakhs?
If the customer pays in a different currency to a bank account abroad what are the implications?
Dear Sonu,
I agree with Mr. Manoj, as the section 65 has become inoperative from 1 July 2012; and the said meanings as has been derived by you may be obtained vide Para 2 of the Notification No.26/2012-ST dated 20 June 2012.
I humbly request to take note of such facts, as such articles may mislead to novices.
With due respect, I would like to bring to the notice that after the negative list concept, section 65 has become inoperative w.e.f. 01-07-12 vide Notification No. 20/2012 dated 05-06-2012.
Dear Pranav
There is no concept of no profit no loss basis service in Finance Act,1994.
Any provider of taxable service whose ‘aggregate value of taxable service in a financial year exceeds nine lakh rupees need to get registered himself with Central Excise board and he is has to pay service tax if preceding year value of service provided exceed Rs 10 Lakh .
Does an unregistered body / association of person who arranges tours like trekking etc on no profit no loss basis is required to pay ST?