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2023 (5) TMI 566 - AT - Service Tax
Adjustment of service tax already paid with subsequent service tax liability instead of filing refund - cancellation of Air tickets - issuance of Credit Notes towards the cancellation amounts paid to the clients - Point of Taxation Rules, 2011 - whether Service Tax is required to be discharged, the moment the Invoice is made by the Appellant and subsequent issue of Credit Note will not have any impact on the future Service Tax payable? - HELD THAT:- The Delhi Tribunal in the case of JJANTA TRAVELS (P) LTD. VERSUS COMMISSIONER OF C. EX., CHANDIGARH [2007 (8) TMI 72 - CESTAT, NEW DELHI] has held that that The air travel agent in his fortnightly return gives the particulars of tickets cancelled or modified and adjusts the commission accordingly subject to final approval by the airlines. Since the commission is adjusted automatically and the service tax is paid on the net commission received, the question of separately claiming refund of service tax need not arise.
The Department has preferred an Appeal before the Punjab & Haryana High Court which has held that It was noticed in the circular that cancellation or modification of tickets is a common phenomenon and frequent feature in air travel. Details of cancelled or modified tickets are provided by a travel agent in the fortnightly returns filed and adjustment of the commission is made subject to final approval of the airlines. The commission is ultimately paid by the airlines on the net commission received by a travel agent. Accordingly, no question arises for separate claim of refund of service tax.
Since the Appellant has been following the practice as per the Trade Notice No. 6/97-ST dated 1/7/1997 issued by the DOR and issue is also squarely covered by the decision of the Delhi Tribunal duly affirmed by the Hon’ble Punjab and Haryana High Court.