Case Law Details
In re Golden Vacations Tours and Travels (GST AAR West Bangel)
What is the classification of the standalone service of arranging accommodation in a hotel and is input tax credit admissible?
The Applicant is admittedly a tour operator. But the question on which the advance ruling is sought is whether it should continue to be classified as a tour operator when it merely arranges the client’s accommodation in hotels. It is not unusual for tour operators to bulk book rooms in hotels and release a few of them to clients who either do not book for the tour or prefer to reach by own arrangement and pay only for the accommodation. Arranging accommodation may also be a standalone business. Such a service cannot be classified as tour operating. According to Explanation to SI No. 23(i) of the Rate Notification, tour operator means any person engaged in the planning, scheduling, organising, and arranging tours by any mode of transport. Arranging accommodation might be provided as add-ons, but that is not the essence of the tour operating service. The Applicant’s service under focus in the Application is not, therefore, to be treated as that of a tour operator.
Neither is it the accommodation service as classified under SAC 996311. Accommodation service under SAC 996311 is limited to the one provided by the hotels, guest house etc. SI No. 7 of the Rate Notification refers to the accommodation service as classified under SAC 996311, and, therefore, leaves no room for the suppliers like the Applicant who arrange such accommodation in hotels.
The support services covered under SI No. 23(iii) of the Rate Notification include services classified under SAC 998552. Services covered under SAC 998552 include arranging reservations for accommodation services for domestic accommodation, accommodation abroad etc. The Applicant’s supply is specifically covered and, therefore, classifiable under SAC 998552. It is, therefore, taxable under SI No. 23(iii) of the Rate Notification, and the Applicant is eligible to claim the input tax credit as admissible under the law.
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