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2023 (5) TMI 808 - AT - Service TaxLevy of service tax - Room Charge Retention on cancellation of accommodation by their customers during the years 2012-13 to 2015-16 - Revenue contended that the amount retained was not for provision of 'Short-term Accommodation Service', as no service whatsoever has been provided by the appellant to the customers for the income so earned - Declared Service as per clause (e) of Section 66E of the Finance Act, 1994 or not - HELD THAT:- The amounts retained by the appellant from the advances received for the provision of the taxable service on cancelation of the agreement to provide the service, are to be taxed under the same category of the taxable service which was agreed to be provided, the consideration for the same would be the amount retained and the service tax shall be payable on the value determined taking the said amount as the value of the service to be provided. The issue involved in the present case is no longer res-integra. The issue is squarely covered by the decision of this Delhi Bench in the case of M/S LEMON TREE HOTEL VERSUS COMMISSIONER, GOODS & SERVICE TAX, CENTRAL EXCISE & CUSTOM [2019 (7) TMI 767 - CESTAT NEW DELHI] it was held that the retention amount (on cancellation made) by the appellant does not undergo a change after receipt and no service tax is attracted under the provisions of Section 66 E(e) of the Finance Act. CBIC has vide Circular No 178/10/2022-GST dated 3- 08.2022 clarified that amount forfeited in the case of non - refundable ticket for air travel or security deposit or earnest money forfeited in case of the customer failing to avail the travel, tour operator or hotel accommodation service or such other intended supplies should be assessed at the same rate as applicable to the service contract, say air transport or tour operator service, or other such services. Admittedly appellant has paid service tax on the room retention charges collected by them on cancellation of the booking by availing the exemption/ abatement as per notification No 26/2012-ST treating them as “Short term accommodation services” - there are no merits in the impugned order - appeal allowed.
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