TMI Blog2022 (4) TMI 1035X X X X Extracts X X X X X X X X Extracts X X X X ..... peal No.464/2011 - Final Order No. 40143/2022 - Dated:- 21-4-2022 - Ms. Sulekha Beevi C.S., Member (Judicial) and Shri Raju, Member (Technical) Ms. Radhika Chandrasekar, Advocate for the Appellant Shri Arul C. Durairaj, Superintendent (AR) for the Respondent ORDER The appellant is engaged in providing service under the category of Air Travel Agency Service and are paying service tax on the commission received from the airlines. During the course of investigation conducted by the Service Tax Department, it was found that the appellant had received incentives / commission from CRS Developers (Centralized Reservation System) namely M/s. Galileo India Pvt. Ltd., M/s. Abacus Distribution System (India) Pvt. Ltd., M/s. Amad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icketing Association [IATA] and is engaged in providing air tickets. The travel industry basically comprises of five key players namely airlines, travel agents, Central Reservation System [CRS] Companies, sub-agents and passengers. The airlines provide air transport services to passengers and discharge their service tax liability in terms of Section 65(3b) read with Section 65(105)(zzzo) of the Finance Act, 1994 [Finance Act]. The travel agents accredited by IATA are authorized to sell the air travel services provided by airlines to customers/sub-agents in the form of airline tickets. CRS Companies provide an online portal for booking of tickets offered by various airlines. They enter into agreements with airlines for rendering Online Info ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engers/sub-agents. Earlier, the IATA agents were charged by the CRS Companies for access to the portals. However, due to increasing competition in the market, the CRS Companies stopped charging the agents for booking through the portal and instead, in order to increase the flow of business, the CRS Companies started to part with a portion of their consideration (charges/commission) and paid the same to the IATA agents when the agents achieve a minimum quantum of bookings through the concerned CRS portal. This incentive is normally termed as CRS commission . The three CRS Companies involved are Amadeus India Private Limited [Amadeus], Interglobe Technology Quotient Pvt. Ltd. [Galileo] and Abacus India [Abacus]. ***** ****** ****** **** ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classification of the service would fall under air travel agent services and not BAS. ***** ****** ****** ****** 80. It, therefore, clearly transpires from the aforesaid decisions that incentives paid for achieving targets cannot termed as consideration and, therefore, are not leviable to service tax under Section 67 of the Finance Act. ***** ****** ****** ****** 84. The inevitable conclusion, therefore, that follows from the above discussion is as follows :- (i) the air travel agent is promoting its own business and is not promoting the business of the airlines; (ii) the air travel agent is not promoting the business of the CRS Companies; (iii) in any view of the matter, the classification of the service would fall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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