Whether discount given in the form of hotel accommodation, transportation etc. leviable to service tax?

PJ/Case Laws/2012-13/1463

Case:- M/s RAM KRISHNA TRAVELS PVT LTD V/s COMMISSIONER OF CENTRAL EXCISE, VADODARA

Citation:- 2013-TIOL-296-CESTAT-AHM

Brief facts:- The amounts that have been confirmed by the adjudicating authority as service tax liability, interest thereof and penalties have been imposed on the ground that the appellant has not discharged the service tax liability under the service category of tour operators, despite having registered as such.

Appellant’s Contention:-Ld. Counsel would submit that the appellant is registered under various services rendered by them and is also air ticket agent. It is his submission that the appellant purchases tickets from the air lines at a cheap rate and offers discounts to his customers in form of hotel accommodation, transportation etc. at no additional cost, subject to that the said customer pays the published fare of such tickets. He would submit that the judgment of the coordinate bench in the case of Jet Airways (India) Ltd. - 2012-TIOL-872-CESTAT-MUM and National Aviation Company of India -2012-TIOL-188-CESTAT-DEL, will directly apply in this case.

Respondent’s Contention:- Ld. DR on the other hand would submit that the stay order given in the case of National Aviation Company of India was due to the reason that there was a severe financial hardship. It is her submission that the appellant is planning and organizing the tour in such a way and hence he is liable to discharge the service tax liability on the differential amount which has been fastened. It is also her submission that appellant having been registered under tour operator should have brought to the notice of the departmental authorities.

Reasoning of judgement:- On careful consideration of the submissions made by both sides, it is found that it is undisputed that appellant herein is raising invoice on his customer for the published fare and he is not indicating therein that they are charging some amount towards the accommodation, transportation from air port to the hotel or site seeing etc. Tribunal find that the stay orders of the coordinate bench in the case of National Aviation Company of India and Jet Airways (India) Ltd. may cover the issue as the activity undertaken by the appellant would be in the same category as has been brought out in those orders of co-ordinate bench. At the same time, it is found that in this case the appellant has deposited an amount of Rs.28,11,727/- and an interest of Rs.44,994/-. The Hon’ble Tribunal was of the view that the appellant has made out a case for the waiver of the pre-deposit of the balance amounts involved. Accordingly, application for the waiver of pre-deposit of the balance amounts involved is allowed and recovery thereof stayed till the disposal of appeal.

Decision:-Stay granted.

Comment:-In view of the decisions cited by the appellant and considering the fact that a part of demand along with interest stands paid by them, stay was granted for the balance dues.

Comments

PJ/Case Laws/2012-13/1463

Post a Comment

Query