Seeks to amend notification No. 26/2012-ST dated 20.06.2012 so as to rationalize the abatement for tour operator services.

Central Government vide Notification No. 4/2017-ST, Dated: January 12, 2017 has rationalised the abatement provision w.e.f. 22.01.2017 for all classes of tour operator services by reducing the abatement rate to 40%.

For availing the abatement, the CENVAT credit of inputs and capital goods used for providing the said taxable service would not to be allowed. It can be inferred that, now all inputs services are freely eligible for the CENVAT credit.

Further, the bill issued should indicate that it is inclusive of charges of accommodation and transportation required for such a tour and the amount charged in the bill is the gross amount charged for such a tour including the charges of accommodation and transportation required for such a tour.

Rule 4 of Point of Taxation Rules, 2011 may be referred for determining the Point of Taxation in case of change in effective rate of tax.

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

NOTIFICATION No. 4/2017-Service Tax

New Delhi, the 12th January, 2017

G.S.R. —(E).-I In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 26/2012- Service Tax, dated the 20thJune, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 468 (E), dated the 20thJune, 2012, namely:-

1. In the said notification, in the first paragraph, in the TABLE, for SI. No. 11 and the entries relating thereto, the following shall be substituted, namely:-

(1) (2) (3) (4)
“11 Service by a tour operator 60 (i) CENVAT credit on inputs and capital goods used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

(ii) The bill issued for this purpose indicates that it is inclusive of charges of accommodation and transportation required for such a tour and the amount charged in the bill is the gross amount charged for such a tour including the charges of accommodation and transportation required for such a tour”.

2. This notification shall come into force on the 22nd day of January, 2017.

[F. No. 354/42/2016-TRU]

(Anurag Sehgal)

Under Secretary to the Government of India

Note:-The principal notification No. 26/2012 – Service Tax, dated 20thJune, 2012, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (i) vide number G.S.R. 468 (E), dated the 20thJune, 2012 and was last amended by notification No.38/2016- Service Tax, dated the 30th August, 2016, vide G.S.R. 835(E), dated the 30th August, 2016.

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3 responses to “CBEC rationalizes abatement for tour operator services”

  1. Rahul Mittal says:

    it will be 9% after Abatement in all services provided by Tour Operator

  2. Rahul Mittal says:

    As per Notification 04/2017, Cenvat on Inputs and Capital goods will not be allowed. How it is ensured that Inputs is only for Input goods and not for Input Services.

    As Govt. notification is silent on this. whether there is any clarification on this received from Govt.

  3. YOGESH TALWAR says:

    WHAT WOULD BE THE RATE FOR TOUR OPERATORS PROVIDING ONLY BOOKING SERVICES

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