Make My Trip Eligible for Abatement Notification Benefit as Facilitator Between Hotel & Customer

Make My Trip (India) Private Limited Vs Additional Director General (CESTAT Delhi)

Conclusion: When a person, otherwise was qualified as a tour operator but provide only booking of accommodation service, then such a tour operator would be entitled to claim abatement under the Abatement Notifications as assessee-Make My Trip acted as a facilitator between hotel and customer for short-term accommodation service.

Held: Assessee was an Indian online travel company that owns an online platform named “makemytrip.com, which allowed customers to book hotel rooms, flight bookings, train bookings, and bus tickets through its website application. It registered itself with the Service Tax Department for the provision of air travel agent services and tour operator services. In the “User Agreement entered between assessee and the customer, it had been mentioned that assessee always acted as a facilitator between the customer (user) and the hotels, and the liability of assessee was restricted to providing confirmed bookings through its online portal. During the relevant period, assessee discharged the service tax liability on the entire amount received from the customers (which was inclusive of taxes) under the category of “tour operator services” by availing the benefit of abatement of 90 per cent under notification dated 01.03.2006 (till 30.06.2012) and under notification dated 20.06.2012 (w.e.f. 01.07.2012). Department contended that assessee was providing short-term accommodation service and not tour operator service, and, therefore, the demand under Section 73 of the Finance Act had been confirmed under this head. It had, therefore, to be determined whether assessee was providing short-term accommodation or not. The show cause notice and the Statement of Demands were issued to assessee primarily containing the following allegations against assessee as assessee was engaged in the provision of service of short term hotel accommodation and thus liable to pay service tax under the category of short-term accommodation service taxable under section 65(105)(zzzzw) of the Finance Act (pre-1.7.2012) and under section 66B of the Finance Act (post-7.2012). It was held that a tour operator could provide for a host of services, including booking of accommodation, transportation and food facility. However, when a person, otherwise was qualified as a tour operator but provide only booking of accommodation service, then such a tour operator would be entitled to ninety percent. What was required was the qualification of a tour operator itself (qua the person), and not as the services rendered (qua transaction). It was, therefore, not possible to accept the contention of the department that each transaction relating to the service that was provided had to be examined. Thus, as assessee was a tour operator it would be entitled to claim abatement under the Abatement Notifications.

FULL TEXT OF THE CESTAT DELHI ORDER

Service Tax Appeal No. 51844 of 2021 has been filed by M/s Make My Trip (India) Private Limited¹ to assail the order dated 29.07.2021 passed by the Additional Director General² confirming a portion of the demand proposed in the show cause notice dated 17.10.2016 and the two Statement of Demands dated 22.10.2018 and 12.04.2019 issued under sections 73 and 73A of the Finance Act 1994³ with interest and penalty.

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