Service Tax on services rendered by Tour operators

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..... s regard. 2. Tour Operators 2.1 As per Section 88 of the Finance Act, 1997 `Tour Operator' means a person who holds a tourist permit granted under the rules made under the Motor Vehicles Act, 1988 and tour means a journey from one place to another irrespective of the distance between such places and the taxable service means any service provided to any person by a tour operator in relation to a tour. The rate of service tax is 5% and the value of taxable service in relation to the service provided by a tour operator to a client, shall be the gross amount charged by such operator from the client for services in relation to a tour and includes the charges for any accommodation, food or any other facilities provided in relation to such .....

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..... States will not be covered by the levy as they do not require a tourist permit but operate on the strength of agreements between the concerned State authorities. 2.4 The services rendered by the tour operator may be only for providing transport service within or outside, the town, city or State's territorial limits. The services rendered by the tour operators may only be limited to providing transport service in relation to a tour or it may also include host of other services as in case of a package tour. The services provided by such a tour operator may also include, apart from providing the basic services of transportation from one place to another, services of providing boarding and lodging arrangements, local sightseeing and guide se .....

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..... e bill issued for this purpose includes cost of such accommodation (Notification No. 40/97-S.T. refers). However this abatement will not be allowed in case the bill issued does not include the cost of such accommodation. 2.6 Service tax on services rendered by tour operators is only on services rendered in India in respect of a tour within Indian territory. Services rendered by tour operators in respect of out-bound tourism i.e. for tours abroad, do not attract service tax. In case of a composite tour which combines tours within India and also outside India, service tax will be leviable only on services rendered for tours within India provided separate billing has been done by the tour operator for services provided in respect of tours wi .....

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