Service tax on Tpt of passanger, Service Tax

[sunil jain]

As per exemtion list vide item no. 23 in notification  no. 25/2012, dt 20th June, 2012,  Transport of passengers by  air embarking from or terminating in an airport located in the NE states is a exempted service.

In case aircraft is provided on wet lease for use  of PASSANGER SERVICE only between two NE states,whether lease rent charged would qualify for this exeption. In my view this should be exemped as aircraft use ifor eligible purpose.

 

Thanks,

 

CA. R.K. Aggarwal

Posts / Replies

[JAMES PG]

Lease income towards supply of tangible goods is chargeable to Service Tax even prior to 1.07.12. So long as NE States is not covered under non-taxable territory, it is subject to ST. Exemption is restricted to the  air lines on the air fare collected from the passengers

[Seetharaman K C]

As per my understanding the exemption covers the service of transportation of passengers only. I beleive that the intention here is to give relief to air passengers travelling to and from North East destinations   Here the subject matter is "Wet lease" which comprises the hiring of an aircraft along with the crew. This service would therefore be subject to service tax

[Pradeep Khatri]

Yes, there is an exemption available to 'Seven Sisters' i.e. N.E. States in this regard despite of wet lease or dry lease.