Advance Ruling 

Name of the Applicant:- M/s Crown Tour and Travels Advance Ruling No. :- RAJ/AAR/2019-20/25 Date Of Ruling :- 26/11/2019

Brief facts of case:-

The application in business of providing Tour Operator as well Support Services in particular set of transactions, the Applicant received service orders from the main tour operator to operator to provide a complete package tour. In turn the main tour provide a range of services to the passenger tourist. There is a contractual understanding between the tourist and the main tour operator engages the Applicant to provide one or more of the following services (hereinafter referred as Agency Services

i. Elephant Ride at Amber Fort

ii. Guide Charges

iii. Assistance Charges

iv. Home Host Dinner

v. Lunch/Dinner at Local Restaurant

vi. Boat Ride at Udaipur

vii. Camel Ride at Jaisalmer

viii. Saree/ Turban tying

Question sought by Applicant:-

Whether rate covered under heading 9985(i) @ 2.5% or 9985(iii) @ 18% on supply of services by tour operator is applicable?? 

Submission  of Applicant:- 

i) In the Rate Notification, the phrase Tour Operator has been defined to mean:

a) Any person engaged in the business of planning scheduling. organizing arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport any person engaged in the business operating tours.

b) That as per the definition of Tour Operator the same will include the person who provides services in the nature of planning,  scheduling, aranging tours (which may include arrangements for accommodation, sightseeing or other similar Services) by any mode of transport. Thus, the definition of Tour Operator clearly requires that such person must also provide transport services.

c) Certain services as specified falling under Heading 9985(i) (i.e tour operated services provided as a consolidated package) are leviable to GST 5%. That the services which are not qualified under the specified category of Supply of Tour Operator services, falls under the heading 9985(iii) (i.e. other support services and are leviable to tax 18%.

Facts and Findings – As per concerned officer :- 

i) To determine whether the Applicant qualifies under Heading 9985(i) or 9985(iii), it is relevant to examine the meaning of the terms Tour and Tour operator for the purposes of the Notification No 11/2017 Central Tax (Rate) dated 29.06.2017 (as amended) and accordingly verify whether the applicant is within the ambit of such terms. The same has been discussed here The meaning of team to his not been defined in the above said Rate Notification, therefore, reference is made to the dictionary meaning of the term Tour AS per dictionary, the Term Tour is defined in –

Shorter Oxford English Dictionary pg. 3309 (5th Ed Vol 2002 Tour: A journey or period  of travel from place to place esp. a holiday comprising visits to a number of places on a route through an area.

Hence, Tour means a travel from one place to another by any mode of transportation.

In view of the definition of tour and tour operator, we find that supply of transport service in a tour package is very essential to classified as tour operator under GST Act.

While examining the submission of the applicant, we observe that the applicant is engaged in business of providing services like sightseeing and other similar services but not providing service of transportation and accommodation, thus it is providing/supplying only a part of tour related services.

As per Notification No. 11/2017 Central Tax (Rate) 28/06/2017 Heading 9985 covers : Supply of Tour operators services Explaination:- “tour & operator” means any person engaged in the business of planning, scheduling, organizing,  arranging tours (which may include arrangement for accomodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours.

the tax rate is applicable on above heading is 5% on supply of such services.

While going through the above notification, we find that two conditions are essential to categorize a tour operator which are mentioned below:-

a Bill issued for supply of tour operating service should be a consolidated one e inclusive of accommodation and transportation charges

b. Provided that credit of input tux charged on goods and services used in supplying the service mother then the input tax credit of input service in the same line of business (to, tour operator services procured from another tour operator] has not been taken

In view of above conditions we observe that a gross amount should be charged by the Tour Operator for the entire Tour. In present case, the services provided by the Applicant has various activities like Elephant/ Camel ride, Boat ride, Guide services, local sightseeing, dinner/lunch at local restaurant etc. For each such service no separate invoice is issued to the tourist and one consolidated bill is raised by the Applicant to the tour operator. The Applicant does not charge for the accommodation and transportation services as the same is not provided by the Applicant. Thus, the applicant does not satisfy the conditions for tour operator’ and services provided by the applicant cannot be treated as “Tour Operator Services” in terms of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017.

Ruling

a. The Ancillary Services provided by the applicant to various tour operators falls under Chapter heading 9985 (iii) (Support Services) of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 (as amended)

b. The applicable rate of GST for ancillary services provided by the applicant to various tour operators is 18% (SGST 9% + CGST 9%).

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