Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2023 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (10) TMI 1388 - CESTAT MUMBAI - LBNon-payment of service tax on outbound tours - tour operator service - service provided within the taxable territory or not - services relating to “outbound tours” provided by the appellant would be covered under the category of “tour operator” services under section 65(115) of the Finance Act or not - liability for the period from 10.9.2004 - HELD THAT:- The decision of the division bench of the Tribunal in M/S COX & KINGS INDIA LTD., M/S TRAVEL CORPORATION OF INDIA LTD. AND M/S SWAGATAM TOURS PVT. LIMITED VERSUS CST, NEW DELHI [2013 (12) TMI 1024 - CESTAT NEW DELHI], therefore, holds that where a person is engaged in a composite activity of operating tours and planning, scheduling, organizing or arranging of tours (including arrangements for accommodation, sightseeing or similar activities) by a mode of transport other than by a tourist vehicle covered by a permit issued under the provisions of the Motor Vehicles Act or the Rules made thereunder, such activity would fall outside the scope of the definition of a tour operator. However, the activity of planning, scheduling, organizing or arranging tours including operating the tour in a tourist vehicle covered by a permit granted under the Motor Vehicles Act or the Rules made thereunder would fall within the ambit of tour operator. Whether the service that the appellant is providing is a taxable service under section 65(105)(n) of the Finance Act? - HELD THAT:- The division bench in Cox & Kings examined whether the activity of providing services in relation to outbound tours during the period from 10.09.2004 to 30.09.2008 would fall within the ambit of a service provided by a “tour operator” and consequently subjected to levy of service tax. The division bench observed that the definition of “tour operator” has two facets. The business of planning, scheduling, organizing or arranging tours by any mode of transport including where the tour is by a tourist vehicle covered by a permit under Motor Vehicles Act is one facet of the definition, while operating of tours in a tourist vehicle covered by a permit granted under Motor Vehicles Act including planning, scheduling, organizing or arranging of such tours is another facet. Thus, where a person pursues a composite activity of operating tours and planning, scheduling, organizing or arranging of such tours by a mode of transport other than a tourist vehicle covered by a permit under the Motor Vehicles Act, then such activity would fall outside the scope of the definition of “tour operator” - The operating of a tour “by any mode of transport” would have clearly covered operating tour in a tourist vehicle covered by a permit granted under the Motor Vehicles Act and so the inclusionary clause would be rendered surplusage. The first part of the definition of a “tour operator” defines it to mean any person engaged in the business of planning, scheduling, organizing or arranging tours by any mode of transport. This would be an exhaustive definition of a “tour operator”. However, the definition also provides that a “tour operator” would include any person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act or the Rules made thereunder - The first part of the definition of a “tour operator” is by any mode of transport and, therefore, there is no restriction about the territorial jurisdiction of the country. It only deals with the planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport - It is, therefore, not possible to hold that what is contained in the inclusive clause of the definition is necessarily not contained in the first part of the definition as was held by the division bench in the earlier decision in Cox & King. The decision of the Principal Bench in Cox & Kings, based on validation of the Circular of 1997 as not being impacted by the several changes in the definition of “tour operator”, may not be applicable in case of “outbound tours” over the period of time that the activity had been taxable. There can, thus, be no two opinions about taxability of tours undertaken within India. However, the definition in section 65(105) of Finance Act is not limited to the physical aspect but also the precursor preparation which is taxable on its own standing within the scope permitted by section 65(105)(n) of Finance Act. Such evaluation of extent of taxability cannot be decided upon without reference to the factual aspects of the activity sought to be brought within the tax net by service tax authorities. Thus, the taxability of activity undertaken by the appellant will have to be decided on the facts peculiar to the case and in accordance with intent of section 65, section 66 and section 67 of the Finance Act - The dispute in this appeal, i.e., from 01.04.2005 to 31.03.2011, pertaining to the period prior to the “negative list” regime does not have to consider “taxable territory” as affecting the decision thereon. The papers may be placed before the division bench to decide the appeal on merits.
|