Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

M/s Bird Travels (P) Limited Versus CCE, Delhi-I and CST-Delhi-I (Vice-versa)

2016 (8) TMI 720 - CESTAT NEW DELHI

Promoting and marketing services for international airlines in India - Business Auxiliary services (BAS) - receipt of additional Overriding Commission (ORC) and target incentives - BTPL are engaged in the business of providing travel related services. - Extended period of limitation - Held that:- there is no ambiguity that legislature in terms of Export of Services Rules, 2005 intended that services consumed outside India shall be exported. It was further held that service that is sought to be t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rvices are covered by export. - The question involved is one of close interpretation of the legal provisions and there is nothing on record to show that there is a positive act of suppression or wilful mis-statement of any relevant facts by BTPL to enable the department to sustain the demand for longer period. We do not find any justifiable reason to interfere with the findings of the lower authority on the question of time bar. - The tax liability, if any, is upheld only where the condi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ment involving the same issue of service tax liability on BTPL in respect of commissions received by them from various foreign airlines in their capacity as General Sales Agents (GSA). 2. The brief facts of the case are that BTPL are engaged in the business of providing travel related services. They are also functioning as GSA for various foreign airlines from whom they receive additional Over- riding Commission (ORC) and target incentives. The contention of the department is that BTPL were enga .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cision is whether or not BTPL are liable to service tax in respect of over-riding commission and target incentives received by them from airlines in their capacity as GSA. In this connection, it is necessary to note the nature of GSA agreements and the functions and responsibilities of BTPL in terms of such agreements. The main points of the agreements are reflected in the impugned order and are as below: "(i) Facilitating and promoting the expansion of PARENT AIRLINES services in the area .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

RAL SALES AGENT (ii) Achievement of sales target in any given time frame assigned by PARENT AIRLINES. Any repetitive failure to meet the sales target shall be cause for termination. (iii) To provide sales and marketing reports, business plans and other relevant reports as and when directed by PARENT AIRLINES (iv) Efforts in the area to obtain traffic for the services of PARENT AIRLINES, such efforts to include:- (a) Provision of and efficient operation of suitable Enquiry, Sales Reservations and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

windows and interiors of all the GENERAL SALES AGENTS offices in the area and such advertising publicity and display material are to be based on PARENT AIRLINES standards. (e) To notify the GENERAL SALES AGENTS reservations and ticketing staff and to Sales Agents in the area, instructions, special advices and sales points sent to the GENERAL SALES A GENT by PARENT AIRLINES. (v) Hiring adequate and suitably qualified personnel for various positions in the areas of reservations, ticketing, sales, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

senger Tickets, Miscellaneous Charges Orders or any other appropriate documents in connection with all sales made on behalf of PARENT AIRLINES, providing service of manual ticket booking to the sales agents who are not authorised by IATA. (viii) Advice to passengers concerning passport, health, currency immigration and other regulations in force in countries to any through which they are to travel and ensuring that such regulations are observed by all such passengers. (ix) The GENERAL SALES AGEN .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Area and keeping the clients informed of all the activities of the BSP which affect the client Airlines. (xii) Supervision of ground handling agents. (xiii) To assist and facilitate PARENT AIRLINES and its staff in all manner for any functions such as business events, seminars, familiarization trips and duty travel including, but not limited to, in getting the best deal and rate for hotel accommodation, hotel catering transportation and governmental networking. (xiv) To make payments for and on .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

i) above . 5. The main contention of BTPL is that the travel agents are discharging service tax @ 0.5% (now 1.2%) of the base fair in the case of international tickets. The department cannot subject the same transaction to another service tax under the category of BAS. We find that this particular argument of BTPL is misleading and erroneous. The air travel agents as well as BTPL when issuing tickets for international travel are discharging service tax as air travel agents as per the rate mentio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

simply only on sale of tickets whereas as GSA BTPL are involved tin various activities which are not simply sale of tickets. These activities are generally aimed at promotion of business of foreign airlines. We find the original authority has examined this issue in detail and made the correct distinction between the ticket booking activity of air travel agent and the functions and responsibilities of a GSA. We find that BTPL's claim, that the ticketing charges including commission on such ti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

efore the Tribunal in ETA Travel Agency Pvt. Limited -2007 (7) STR 454 (Tri. Bang.) and in Trans Lanka Air Travel Pvt. Ltd. - 2007 (7) STR 476 (Tri. Chenn.). The Tribunal held that these ORC/ target incentives are liable to service tax under BAS. 6. Considering the above position, we find that the service tax liability on BTPL has been correctly held by the original authority in the impugned order dated 19.10.2009. 7. Regarding department's appeal against the impugned order dated 19.10.2009, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that intimation given to the department prior to the introduction of new levy is of no consequence. We find that there is no sufficient justifiable ground to overturn the detailed finding given by the original authority on the question of time bar. The admitted fact is that BTPL had intimated their activities to the department. Secondly, it can fairly be conceded that when the travel agents paid service tax on ticketing charges on fixed percentage, there could be a bonafide belief that there is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ower authority on the question of time bar. 8. In respect of two appeals by BTPL against the impugned orders dated 27.11.2012 and 08.07.2014, BTPL strongly contended that in respect of three foreign airlines, Hann Air, S. N. Brussels and Iceland Air, the services provided as GSA are to be treated as export of services. It is the case of BTPL that these airlines do not have any office in India and as such based on the decision of the Tribunal in Paul Merchants - 2013 (29) STR 257 there is no serv .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version